It’s time for a check upIt’s time for a check up

First, don’t fret about your check up

Lots of people avoid going to the doctor because they’re worried about what the doc might find. You might be avoiding your financial check up for the same reason—you know deep down that you’re not going to like what you see.

If this sounds like you, you’re not alone! One study estimated that 80% of New Years resolutions get abandoned by February. It’s not just common for people to slip up by this time of the year; it’s actually uncommon for people to not slip up.

So be kind to yourself. Don’t worry too hard if you’ve invested less than you intended on investing this year, or not invested at all. Instead, look on the bright side: we may be three months in, but that also means there’s nine months left in the year! You’ve got lots and lots of time to turn things around.

In order to be kind to yourself, you also need to be honest with yourself. So log in to your Sharesies account and compare your investments to the goals you set back in January. Once you know how on-track (or off-track) you are, you can start making a plan—but you need to know what you’re dealing with first.

Do you need to adjust your goal?

If you’re nowhere close to hitting your goal, you can always adjust it. This could be because your goal was too ambitious, or your situation has changed and you have less money to invest than you thought you’d have. Or maybe your goal is not the same one it was three months ago.

Either way, the key is to be realistic about what you can do. It’s much better to choose an affordable amount that you can sustain over time, than to choose an overly-ambitious amount, and abandon it. In other words, it’s better to invest something than to invest nothing at all.

If your goal has changed, or it’s too hard to hit it, go ahead and change it! This doesn’t necessarily have to mean changing the amount, either. You can adjust your timeframe as well as adjusting the total amount you want to invest. If you decide you want to achieve your goal in 10 years instead of 7 years, you can put aside less each week—or visa versa if you want to achieve your goal faster!

On top of this, remember that your goal can go both ways. If you need to drop it down by a little bit for now, that doesn’t mean it needs to stay there forever. Once you drop to a sustainable level, you could try to gradually increase it. Maybe you invest $10 this week, and $11 next week, then $12, and so on. Little by little, you’ll build an investing habit and adjust your spending habits around it.

Can you split your goal into chunks?

One of the pitfalls of long-term investing is that it can feel like a real slog, especially in the early days. Let’s say you want to invest $10,000 in 5 years. That’s about $40 a week.

If you diligently invest your $40 a week for 3 months, you’ll have $480 in your Sharesies account—plus or minus any price differences. It’s a start, but it’s not $10k. This is the realisation that causes a lot of people to get demoralised and give up. $480 feels a lot closer to 0 than $10,000.

You can short-circuit these unhelpful thought patterns by breaking your goal into chunks.

Let’s look at that $10,000 in 5 years another way. It’s actually $2,000 a year, for 5 years. So rather than a big goal of $10,000, you have a much more reasonable goal of $2,000. Next year, your goal will be another $2,000—and so on for three more years after that.

We know that this is exactly the same thing as saving up $10,000. But humans aren’t rational. If we recognise this fact, and change our behaviour around it, we can essentially “trick” ourselves into achieving our goals.

Getting those returns

There’s another advantage to this approach: it makes your returns look even better! Remember, you’re investing, not saving—so your investments should actually grow over time.

Let’s say you put aside $2,000 in your first year. The market goes up and down, but on average, you might get a 5% return. If you manage that, your balance at the end of the year will be $2,100. Nice! If you put away another $2,000 next year, you’ll be at $4,100—you’ve gone above and beyond your goal! And that’s before you calculate for any returns you may make in the second year, and any returns you make on your returns. Over time, this all really adds up.

So give this a go. If you finish your check up and realise you’re not hitting your goals, go ahead and adjust them if you need to, then split them into chunks. And don’t just do this once—check back again in a few months, then check back again a few months after that. You’ll be surprised at how quickly your income, personal situation, risk tolerance and goals will change. Regular check ups are the best way to make sure you’re investing the amount you need to get the things you want.