This week, the theme is financial resolutions for 2020.

Each day this week, I’m giving you ideas on how you can adopt a financial resolution for 2020.

Today’s financial resolution for 2020 is: a resolution to plan. Ugh, that sounds so boring just saying that...plan. But good planning is the key to success in any meaningful endeavor, especially with your retirement.

Planning involves setting a goal and then sketching out the steps you’ll take to meet that goal. Planning is essential to help you make better decisions through focused planning in 2020. Without a plan, it’s easy to get distracted and derailed with shiny little objects.

Let’s go through a quick example on how you can use planning as a financial resolution in 2020:

• Start by targeting a specific financial goal (like paying off your mortgage or retiring in 3 years) and sketch out the first 3 steps to take in making progress or achieving that goal. Using the example of paying off your mortgage:
• • Step #1 would be gathering the information about your current mortgage (interest rate, loan balance, etc.)
  • Step #2 would be entering that information on a loan amortization table which you can find for free online.
  • Step #3 would be deciding on an extra payment amount or a target date for paying off your mortgage and entering that into the amortization table to figure out how long it would take to pay off your mortgage with an additional payment, or how much that payment would need to be to pay off your mortgage within a specific targeted timeline.
  • Step 4 would be deciding on an extra payment amount and taking action.

Paying off your mortgage is just one example, but I think it provides a nice illustration for the planning process. One of the big benefits of planning is that it breaks up a seemingly overwhelming task - paying off your mortgage - into bite-sized manageable steps. With a good plan, before you know it, you’ll be making consistent progress on those goals that are most important to you.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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