Financial resolutions that stick


Failed at meeting past money goals? Here’s how to succeed this time.

Want to
get your financial house in order in the new year? There are some tricks you can use to
make sure you will achieve your goals this time around.

half of all consumers will make financial resolutions, according to a
New Year Financial Resolutions study
by Fidelity Investments released in December 2012. Fifty-two percent of respondents want to save more, 19
percent want to spend less and 19 percent want to pay off debt.

if history is an indicator, more than a third of those well-intentioned
individuals will fail. Here’s how to make sure you’re not one of them.

1. Get detailed and
goals without getting into specifics is a recipe for disaster, says Gary Ryan
Blair, president of The Goals Guy Learning Systems, a training organization
that helps consumers achieve personal and professional goals. “Getting out of
debt” could mean paying off a $1,000 credit card bill or paying the final $10,000 on your car note. Unless you come up with a specific amount or
percentage to pay off, you can’t create the plan to take you there. Flesh the
goal out by writing it down so it becomes tangible, says Nicole Cutts, a
clinical psychologist and success coach in Washington, D.C.

2. Give yourself a reason. If you say you want to save
$5,000, but don’t know why this is such a great goal, your resolution will go
down the drain the minute you see something else tempting you to spend the
money on. If you want to save $5,000 so
you can afford a larger down payment on a car, write that down when you write out
your goal. Your reason for improving your finances can also be to avoid the
sleepless nights that come with financial worries. “Pain, fear and discomfort
can be massive motivators,” says Blair.

3. Make it realistic. Coming up with specific amounts
and percentages can help you determine if your plan stands a chance. For
example, if you need an extra $15,000 to pay off all your credit card debt,
“that might not be a realistic goal if you make $50,000 a year,” says Cutts. Sometimes
other obstacles can make a goal unreachable. For example, Kinelam Bolgaire, a
social media expert in New York City, did not achieve his resolution of tracking his
expenses on a weekly basis because, “the goal
was not realistic for the amount of time I have available any given day,”
Bolgaire says. A goal that requires an overwhelming amount of effort on
your part, such as having to work three jobs to save a certain amount, should
also be scaled back because it will be difficult to maintain. “Maybe instead of
eliminating all of your debt, you can say you’ll reduce it by half in 2013,”
Cutts says.

4. Learn from past failures — and
Fidelity study showed that some consumers failed before eventually achieving a
goal. “It takes some time to get into the habit and find what works for you,”
says Ken Hevert, vice president of Fidelity Investments. Instead of beating
yourself up about past failures, consider what went wrong and adjust your plan
accordingly. Don’t forget to incorporate those aspects of previous plans that
did work, says Cutts. You can also learn from the failures and successes of
others, Cutts adds.

5. Build intermediate goals. People get a jolt of confidence
when they make progress, says Blair. Rather than striving for one massive
end-of-the-year goal, break your plan into daily, weekly and monthly mini-goals
instead. For example, you might get your budget in order in January, then spend
February organizing your records. To help you break the tasks up, Fidelity has
published a monthly guide to walk you through your 2013 financial resolutions.

6. Check in frequently to measure
 You can’t make a resolution and wait until
next December to see how you did. For example, if you want to save $5,000 in a
year, divide that by 12 and make sure you save $416.66 each month. A monthly
check-in is best, says Cutts. If you check in too often, you could become
discouraged over a lack of progress, while waiting too long gives you too much
time to veer off track. 

Highly successful people
understand that the process is more important than the end result.

— Gary Ryan

The Goals Guy Learning Systems

7. Think process, not results. “Highly successful people
understand that the process is more important than the end result,” says Blair.
If your goal is to save $5,000 by the end of the year, focus on the steps
you’re taking each month to get there, such as cutting back on Starbucks and
increasing your retirement contribution. In doing so, you re-program your
habits. If you truly change your behavior, the result will take care of itself.

8. Make it automatic. You’re less likely to break your
resolution if you automate it. When Elle
Kaplan wanted to increase her savings, “I resolved to start saving at least 20
percent of my income,” she says. Her resolution stuck because, “I made it
automatic each paycheck.” With those savings she started her own investment
firm, Lexion Capital Management, with no outside financial support.

9. Get an accountability partner. It’s good to have someone around
to help you stay committed to your goals, but if you’re trying to better your
finances, you want someone who is good with money. Find a friend who is living
debt-free or who has a healthy savings account to guide you. You can also seek
professional help, such as a coach, money therapist or financial adviser, Cutts
suggests. Finally, tell your accountability partner what you expect from them.
For example, if you want weekly check-in calls, say so. 

10. Don’t forget rewards. When you have small successes
along the way, give yourself a pat on the back. “Reward yourself with something
that will not take away from your goal,” Cutts says. While it’s probably not
wise to spend your newfound savings on a trip to the Bahamas, “you can find
something inexpensive and enjoyable to celebrate your success,” Cutts says.

See related: Infographic: Money-related resolutions hit record high, Get out of debt smartphone apps

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