It’s December and the New Year is rapidly approaching. For many, this marks the time to reflect on shaping the upcoming year with to-do lists – most likely resolutions. With all of the thoughtfulness that goes into creating resolutions many of us fall short with tracking and implementation, as a little less than half of all adult Americans make annual resolutions.
As many know, a common resolution topic is the need to improve physical health which is usually approached with promises to exercise regularly, cease or limit alcohol consumption, eat healthier, and so on. Another common resolution involves improving financial wellness which is commonly supported by a dedication to improve money management and debt reduction. Unfortunately, financial health also hits the top of commonly broken resolutions.
In the article, “Be it Resolved” (New York Times, January 5, 2012), columnist John Tierney gives the following tips for overcoming resolution implementation failures:
- Set a single clear goal. Limit yourself to one big financial resolution at a time, if possible quantify your goal to make it more realistic and measurable.
- Pre-commit. If you are emotionally tied to your goal, you’ll be more invested in sticking with it. You can further bind yourself by emailing your friends with updates or social media postings.
- Goals. Consider setting a financial goal and naming a person to whom you are responsible to enforce your progress.
- Keep track. Begin tracking your finances. Monitoring and tracking tools will help you measure your success and keeping an eye on progress.
- Don’t overreact to a lapse. If you break from your budget, or miss a saving milestone, don’t fret and don’t punish or further exacerbate the situation by giving up on the progress you have previously made. Realign your spending, and get back on track.
- Tomorrow is another taste. If saving money through budgeting is one of your goals, allow yourself to purchase those things that you want, not need, but within a reasonable amount of time. Similar to dieting, where you can promise yourself a chance to taste ‘forbidden’ treats within specified periods of time, the same is true with financial budgeting. Promise yourself you can buy those things you long to have, but within financially reasonably timing.
- Reward often. Celebrate your savings with rewards you’re entitled to purchase when you meet pre-identified goals.
Studies attribute greater success to those who make resolutions and goal-planning, as compared to those who do not. So congratulations in your resolve to improve your financial well being. According to psychologist, John C. Norcross, “A considerable proportion of New Year resolvers do succeed. You are 10 times more likely to change by making a New Year’s resolution compared to non-resolvers with the identical goals and comparable motivation to change.”
We hope these tips help you reach your financial goals in the new year.