Financial Support Groups: Your Financial Makeover Could Be Waiting
You have a fitness tracker to keep you honest about your physical activity and friends to call in times of need. But where do you turn for financial support? When it comes to your money, you might be lacking the support system that will help you stay fiscally fit.
If this sounds like your situation, creating a financial support group might be just the thing to help you build healthy money habits.
A Bit About Goals
According to a study from the University of Scranton, only 8 percent of people who make a New Year's resolution achieve their goals. While that might seem a bit discouraging at first glance — especially for your finances — there's science behind why people fail.
Most commonly, goal failure occurs when people set goals that aren't truly attainable. For example, an unattainable goal would be to focus on saving a million dollars for retirement versus a smaller, more accessible goal of making a $100 monthly deposit in an IRA. Every big goal starts with a small step.
Goal failure also happens when people don't have support systems to help them along the way. The world's most accomplished people use support systems to hold them accountable, provide encouragement, and openly talk about challenges along the way.
Creating a Financial Support System
If having an accepting financial support system sounds like it would help you achieve your money goals, the next step is starting one.
First, reach out to trusted friends and colleagues to gauge their interest. Having a rapport with those you're about to share your financial information with is essential to the group's success. Once you see who's on board to join you on your shared journey to fiscal fitness, it's important to set some basics for how your group will be structured. Here are a few tips to better align the structure and goals of your group over time:
- Identify and Share Your Goals: The beginning of the month is a good time for group members to share both a short-term and a long-term goal with others.
- Establish Purpose: Be clear with the group about why reaching a particular goal is important to you.
- Create Timelines: All goals should have deadlines attached for accountability purposes.
- Ask for Help: If you need help with a financial goal, discuss the kind of support you're looking for from the group.
- Share Successes: Throughout the month, but especially at the end of the month (or at other milestones your group has set), be sure to report success. One member's progress can be the catalyst that inspires other group members — even if your goals differ. Successes, even incremental ones, remind everyone that goals are attainable.
Whichever way you ultimately structure your group, having some structure will help the group stay on-topic and create the culture of accountability you all crave so that everyone meets their financial goals step-by-step.
Building a Culture of Accountability
There's a difference between dipping into savings to buy a flat-panel TV and having to tell multiple people you did the same, especially when those people know that one of your goals was saving for a family vacation this summer.
This social "nudge" that comes along with group dynamics can help everyone in the group make better choices over time. When we know we'll have to stand and report on our actions, there's a certain sense of pride that comes along with making decisions that align with our goals.