Break Your Bad Financial Habits For Good – Longboard

Put long-term gains over short-term pains to reach your goals

Eighty percent of dieters fail to make good on promises to get into shape. Considering past behaviors, I’d bet even more people go back on their financial promises.

Now that it’s time to shed those winter coats for shorts, you might be trying to correct your course on your diet – and on your finances.

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The easiest way to do it is to understand the traps that are set out in front of your goals.

Financial Habits

It’s hard to change habits for long-term gain

It starts out the same.

You resolve to get (back) into shape. The squat racks and spin classes are packed with equally ambitious workout pals. You all do just fine for the first couple of weeks.

But soon you’re frustrated. You’re in pain, hungry and not seeing immediate results. You are only experiencing the downside of working out—not the rewarding stress relief, weight loss and heart health that comes with continual habit. It always becomes harder to build this habit when small setbacks make you feel impatient with your workout plan.

The same is true of your financial life.

It’s easy to resolve to dump your old ways of timing the market. It’s more difficult to actively build a more balanced portfolio, because though this historically has led to a lot of long-term gain it might cause you short-term pain.

The same issue still persists, whether your goals are physical or financial: the gains never seem like enough and the losses seem larger and larger the longer you look at them. (Thanks, prospect theory.)

Ask yourself: what do you want?

All this leads to an important question: do you really want to get to your goal weight? To cut the fat from around your waist or within your portfolio, you’ll need to muster up some emotional strength.

Because if you start to make discretionary and emotional decisions based on short-term thinking, you end up getting further away from your goals.

Don’t underestimate the path traveled

It’s easy to focus on a performance number or a weight loss goal, but each step you take toward achieving that number is hard. Don’t underestimate the path toward your goal.

In order to beat the odds with your physical or financial diet, make sure you:

  1. Create a plan that balances wants and needs
  2. Understand realistically what you can achieve and what you’ll need to sacrifice to get there
  3. Set it and forget it for the year
  4. Each year, rebalance and revise your expectations to ensure you’re reaching your goals

The slow and steady plan isn’t as fun or immediate as crash diets or crazy stock picks. No date on the calendar or summer vacation will be the ultimate motivation to shed the weight of bad habits.

But if you focus on your plan you’ll have a higher chance of actually meeting your goals – and you might just look better in a swimsuit, too.

Article by Longboard Funds