We all have more than a few well-intentioned New Year’s Resolutions that never make it to February. We mean well, and we try hard to stick to our life-changing plans, but it seems inevitable that we’ll fail.
Why? While I can’t speak specifically of your goals and resolutions, I can guess that many of you share the same problem I’ve had in years past: poorly crafted resolutions.
If you want to make lasting financial resolutions, you have to include a certain level of detail in your goals. Read on to find out what I mean.
7 Steps to Creating Financial Resolutions That Stick
1. Make your goals specific.
In order to make realistic financial goals, you have to be very specific about what you want to attain. “I will save more money this year,” gives you lots of wiggle room to shirk your new goals. A more specific goal like, “I will save 7% of my income each month,” is very specific and helps keep you on target.
2. Make your goals measurable.
In order to determine if you’re meeting your goals or if you need to step up your efforts, you have to create a goal that includes measurable outcomes. If you set a goal to spend your grocery money more wisely this month, you have to include examples of what smart grocery shopping looks like. Are you buying items in bulk? Do you only buy groceries when they’re on sale? Are you shopping at discount food stores? Are you spending less on higher-priced processed and ready-to-eat foods?
3. Set a time limit.
Who says New Year’s resolutions have to be set in stone as of January 1st? Make a goal for the first thirty days and include a reminder to set another goal for the next month. Can’t make it through thirty days consistently? No problem. Set your goals for smaller periods of time.
4. Reward yourself.
One of the best ways to create a lasting habit is to make the experience pleasurable. Forget the guilt trip over not keeping your resolutions; just give yourself a break and start anew as soon as you realize you’re failing. Reward yourself often for meeting even the smallest aspects of your financial resolutions.
5. Be realistic.
While we’d all love to become millionaires overnight, setting a goal to become “rich” in a short period of time isn’t very realistic. Don’t set yourself up for failure by including unrealistic details in your financial goals. It’s completely acceptable (and encouraged!) to dream, but not to set goals that are impossible to achieve.
6. Get help.
When setting financial goals for the new year, don’t forget to include an accountability partner to help keep you on track. This person can be a trusted friend, family member, or professional that will check in periodically to see how you’re doing with your goals. When you have to answer to someone else, you’re more likely to curb your undesirable behavior.
7. Change your attitude.
One way to reinforce your desire to make lasting changes is to change the way you perceive your finances. Set a goal to read one book a month about finances, take a financial management class, or spend time with people who have a solid grip on their finances. Talk to people who are where you want to be at the end of the year. Surround yourself with information and encouragement to help make this year’s financial resolutions a success.
What’s your trick for making resolutions that stick?
{ read the comments below or add one }
Kate,
You shouldn’t give your Nephew a thing. If he can’t afford it and can’t buy it on his own, that’s his problem not yours!!! Family or not, your Sister may envy the fact that you are able to do all of these fun things and she can’t.
You have been responsible and maybe she wants you to pay for her being irresponsible. You work too hard for yours for her to tell you what to do with your Money.
As for me, I still do what many people called “Old School” Put Money away in a Piggy Bank, Save The Change, ask for Change in Smaller Dollar Bills instead of Larger. Buy what you need not what you want! Never spend when you are feeling down ie had a bad day at work, etc. Also take a Spreadsheet and calculate what you Spent in a Month as opposed to what you “Made” in a Month, if you spent more than you made, you may have some major problems.
I save for a specific purpose with a defined goal in mind, and then I stop. I have no property, no car, no boat, no cabin, no mortgages, nothing that isn’t paid for or couldn’t be replaced — I have had a lot of fun over my lifetime, travelled the world and essentially I have been able to do anything I wanted to do, because I knew what it would cost to do things and I saved specifically to do them, spent the money happily, and then made a new goal. Among other things I have sponsored a race car in a junior formula, much to the horror of my younger sister who demanded that I give that money to her son instead so he could put a down payment on a car. (She also demanded that I leave my insurance to her children “since you don’t have anybody to leave your money to.” My insurance is made out to Guy Cosmo Racing. So ha ha.) Any goal should have a terminus ad quem, and ad quo. And should be yours and yours alone.
Kate,
You sister doesn’t sound like a very nice person when it comes to your money. Your money is to do as you see fit. You not only don’t have to have life insurance made out to her children, you don’t even need to spend money on having insurance!
Good for you for having (or making) your opportunities to do what you want with your time and money. Congrats! -AJ