Happy 2026! We just finished a third consecutive bull market year, with the S&P 500 Index rising over 15% last year. While not as strong as the two prior years, stocks, or equities, provided investors with positive growth.
As we start the year, I’m not going to suggest resolutions. I am going to recommend intentionality. For many Americans, we are in the fortunate position of not having to count every penny. So we put everything on a credit card and, as long as we can pay it off each month, all is good. What’s the problem?
Truth is, there may or may not be a problem. In the book The Millionaire Next Door, the authors found that most millionaires follow a strict budget. I remember reading that and thinking, “Great, I’m going to be poor forever.” I was never very good at following a strict budget. But about 15% of millionaires use what I consider to be a much easier method. They save what they need to save to reach their goals and spend the rest.
Here's where the intentionality comes in. Are you saving enough to reach your goals? If a comfortable retirement is important, have you figured out where you are in that process, and are you on track? If paying for your children’s education is important, are you contributing to a 529 every month?
If the $7 latte brings you joy, or you are a serious foodie who derives pleasure from fine dining, that’s great. But if eating out and take out meals have just become autopilot, is that habit keeping you from something you really want? If you really want to travel, or you want a boat, or whatever your goal is, can you prioritize that? Set aside that money, then spend the rest however you want.
I think back to the story of the jar. You have golf balls that represent your values: family, financial security, health. You have pebbles that represent other things that are important but not critical: chores, time with friends, hobbies. And you have sand: scrolling on your phone, binge-watching a TV show, video games. If you fill the jar with the sand first, then the pebbles, the golf balls won’t fit. But if you put in the golf balls first, then the pebbles, then the sand, everything fits.
Your budget and money work the same way. Focus on your values and fund those items. Healthy food, housing, savings, insurance. Spend – and save – your money with purpose and intention.
Your action item this week is to review your retirement contributions. If you received a raise for 2026, use part of it to increase your savings.
Our events for 2026 are on our website, including our Financial Foundations class next Monday. On the 20th, our signature Women, Wine & Wisdom™ event goes co-ed with a market update. Join us to hear a recap of 2025 and what we’re thinking about 2026.
CovingtonAlsina is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.