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How to stick to your financial resolutions

The New Year always brings hope. New beginnings, a fresh start. It is a time to follow through on plans that didn’t make the cut last year.

New Year’s resolutions take on many forms. According to statista, here’s what people are focusing on this year:

  • 52% of people want to exercise more
  • 50% of people want to eat healthier
  • 40% of people want to lose weight
  • 39% of people want to save more money
  • 37% of people want to spend more time with family and friends
  • 20% of people want to spend less time on social media
  • 19% of people want to reduce work stress
  • 19% of people want to reduce spending on living expenses

Physical, social, and financial health resolutions are key targets for people looking to improve their quality of life. Yet, only 9% of people successfully keep their New Year’s resolutions. So, how can you stick to your goals? Here we’ll help you understand how to avoid common pitfalls and give you actionable advice to keep your goals top of mind.

Why do some New Year’s resolutions fizzle out?

People have the best intentions when setting their New Year’s resolutions. Gym memberships and attendance skyrocket in the weeks right after the start of the year. person running in the sunsetPeople buy diet programs, budgeting apps, and investment tools, adopt new meal plans, and re-download dating apps heading into February. Much time, money, and effort go into achieving personal goals and resolutions. So, why do people fail so often? And how can you avoid the same?

Here are some of the most common reasons those resolutions don’t work out and what to do about it.

Setting unrealistic expectations.

Too often, we aim too high, setting resolutions that could be more realistic, practical, or achievable. After a few days or weeks, we become discouraged by the lack of progress or difficulty getting anywhere near where we want to be. We may need to give ourselves more time, space, or patience to make reasonable progress, or we get discouraged and abandon the resolution. But setting realistic expectations can make all the difference.

For example, it’s difficult for most people to establish a 3-6 month emergency savings fund. If you want to keep your savings goal more realistic, consider setting a process-oriented goal rather than a results-oriented goal. For example, try automating a deposit from your paycheck to your savings account and avoid touching it for the year. It’s more manageable, and saving as little as $5 to $10 a week will get you several hundred dollars closer to your end goal.

Self-doubt and inevitable slip-ups.

Belief is powerful. If self-doubt begins to creep in, taking the steps necessary for success will be more challenging. You can build your resilience by celebrating even the smallest of victories. As you experience incremental success, such as credit card balances shrinking and spending aligning with your budget, you should celebrate.

Additionally, the people who are most successful at achieving their goals are still not perfect —even if it sometimes seems that way from the outside looking in. Success isn’t about doing everything right. It’s about sticking to it even when you make mistakes. Much of success in attaining a goal comes from your response to slip-ups. Setbacks happen. It’s what you do next that matters most.

For many people who set out to achieve their goal, any misstep feels like a failure. The key is to prevent those bumps in the road from diverting you from your goal. You’re human. It happens. Course correct and get back to it.

Lack of planning.

If you’re going to make a change, you need more than a goal. You need a plan. For example, let’s say your goal is to take your family on a trip this year. Your goal is to save enough to pay for your trip. But how do you get there? Start with these steps and apply them to your personal goal:

  1. Define your goal: Save up for a family trip.
  2. Determine what tasks need to happen to achieve your goal:
    1. Decide on where to go
    2. Do your research and estimate a budget for the trip
    3. Set a target date for reaching your savings goal
    4. Determine how much you can currently contribute to your goal
    5. Calculate how much you have to save between now and your target date to close the gap
    6. Refer to your budget and spending to decide how you’ll free up the funds for additional savings
  3. Decide if there are any additional resources necessary to complete the tasks
  4. Assign tasks to others if you’re planning as a couple or a family
  5. Set a due date for each task
  6. Establish how you will keep track of progress and milestones

Making a plan helps break down a big goal into smaller manageable pieces. Failure often comes from believing that a journey is just the start and the finish while ignoring the work in between.

The key is to make a plan that is reasonable and achievable. For example, if there’s no way that you can save enough for your trip in the timeline of your plan, then something has to change. You may need to find a more affordable option or extend the time between now and the trip.

Financial resolutions to consider.

Financial resolutions can make a dramatic difference in your life. Making sound choices about your finances can position you well now, and in the future.

Deciding which financial New Year’s resolutions to make depends on your situation. No matter where you find yourself, making a few resolutions can have an immediate positive impact. It’s a matter of taking careful, practical steps to make a change.

Here are a few financial New Year’s resolutions to consider this year:

  • Meet with a financial counselor to discuss your challenges and your goals
  • Set up automatic retirement contributions with your employer, or increase your existing contributions to your retirement account
  • Create or revisit your budget
  • Review your credit history and setup credit monitoring tools to protect yourself from fraud
  • Consider your open lines of credit and determine if you have an opportunity to save with a refinance or balance transfer
  • Create a debt payoff plan
  • Review your expenses and consider ways to save money
  • Evaluate your insurance needs to discover if you need more coverage for the unexpected

Any resolution can be challenging to achieve. Creating better financial habits won’t happen overnight. However, take the time to better understand the setbacks that you may experience, put a plan in place to support your goals, and count incremental progress as a success. You’ll be well on your way to achieving your New Year’s resolution.

For more help achieving lasting financial success, consider reaching out to OnPoint’s partner GreenPath for free financial counseling services. You can call GreenPath at 866.294.2963 or request a call.

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