By Steve Garmhausen

It's almost New Year's resolution season, and let's be honest, most of us need to make better resolutions. Unrealistic goals are surely a reason that just 9% of resolutions are kept. So for this week's Barron's Advisor Big Q, we decided to ask financial advisors for a little guidance. After all, advisors have a front-row seat to Americans' financial habits and decisions, and they have seen which behaviors work and don't work. The question: What New Year's resolutions would you like to see your clients make?

Ann Marie Etergino, financial advisor, RBC Wealth Management: Embrace long-term thinking. Particularly in this postelection period when emotions are high, commit to focusing on the long term and the big picture and not reacting emotionally to short-term events. Reacting emotionally can cause long-term harm to portfolios.

Discuss your plans for your wealth openly with your family. Not communicating what your intentions are after you pass can cause all kinds of resentment and hard feelings, particularly if parents aren't leaving their money equally to their children. So talk about what your intentions are and why, and give them a chance to react and ask questions. Open communication really helps reduce future conflict among families.

Along the same lines, commit to educating the next generations, empowering your children and your grandchildren with financial education and stewardship. Maybe talk about, here's how money was treated in our family, here's why it's important to us, here are the values that have been passed down associated with that wealth, and here's how we hope you'll use that money when our time comes.

Bryan Piccirillo, financial advisor, Edward Jones: Edward Jones recently surveyed Americans about their financial resolution habits. What we're seeing a lot is that people are getting back to the basics of savings. In years past we saw a lot more big goals, like saving for vacations, homes, cars, things of that nature. The main resolutions or priorities we're seeing now are building emergency savings, paying down credit card debt and finding ways to increase income.

You know, investing is great, but if you don't have the basics in place, like being able to handle an emergency, and you're tapping your investment accounts, that could cause a lot more harm than good in the long run. So I personally love seeing people focus more on having a good understanding of financial concepts and saving and earning money for unexpected situations.

Cassandra Kirby, chief operating officer, private wealth advisor, Braun-Bostich & Associates: Review your investment strategy with your advisor and stay in communication with them throughout the year. If you keep your advisor informed as to changes in your life throughout the year, they can give you the best advice. Sometimes some event will happen and the client won't tell us until the end of the year, and they have already done all their IRA distribution, so they have missed out on opportunities.

Also, ask yourself if you had a major life change over the past year. If the answer is yes, you should be checking on things like whether you need more life insurance, whether you need to update your estate plan and your beneficiaries. And make it a point to review your spending alongside your savings and set goals that are measurable. Ideally at the beginning of the year, clients should sit down and set their savings goals, and then track them throughout the year. It's pretty rewarding if at the beginning of the year you say, "OK, I'm going to max out my 401(k), and I'm going to put another $10,000 into my cash account." And to see that actually happen is pretty rewarding.

Brent Weiss, head of financial wellness, Facet: I care less about what Facet members want to achieve and more about why they want to achieve it and how they're going to go about achieving it. Eighty percent to 90% of resolutions fail by February. And I think it's because we focus on a what and not a why and a how. The habits, the systems, the consistency that you put in place for yourself will matter far more for your long-term success than setting goals that are too big, that are unrealistic, and that lead to failure in the months ahead. The most important thing we can do is to sit back and ask, "Why do I want to achieve certain goals? What do I value? What do I believe in?" Having that emotional connection to a goal is going to matter far more than what the actual goal is. And then we have to think about how we go about achieving them.

Brian Parker, co-founder and managing director, EP Wealth Advisors: We all fall victim to always wanting to have a little more. If my financial situation puts me to x, then I'll feel comfortable. The problem is that quite often when you achieve x, then there's a new goal, just a little beyond where you are. So my resolution would be to be content with what you've achieved and where you are right now. It's human nature to want more than you have, but that's certainly not what creates happiness. Happiness is created in the now.

Another one would be to allow yourself to fully indulge on occasion, as a reward for so many years of sacrifice. Sometimes being a good spender is being the person who spends the least. But that's not necessarily always true. There are people who have trouble spending, and spending too little and putting off rewards doesn't allow them to enjoy now.

The last one is to have success with the three-legged stool of financial health, physical health, and mental health. They all tend to be connected. And while our job tends to focus on financial well-being, we hope that we also play a small part in the other two.

Write to advisor.editors@barrons.com

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December 19, 2024 11:26 ET (16:26 GMT)

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