New Year's Resolutions and Setting Goals

The New Year's resolution is one of the enduring traditions of the holiday season. It allows everyone to be extraordinarily optimistic - for at least one day.

Unfortunately, follow-through is often in short supply - many of our resolutions will only live to see on January 2nd, despite our best intentions.

While that's obvious to almost anyone who has ever attempted a half-serious resolution, some hard data quantifies just how difficult keeping such promises to ourselves genuinely is. A University of Bristol study showed that 88 percent of New Year's resolutions fail. Yet that same study also revealed something else that was -equally notable: Men and women maintained their resolutions 10 to 22 percent more often if they engaged in goal setting.

What Is Goal Setting - And Why Is It So Powerful?

The idea behind goal setting is elegant yet powerful. Rather than aspire to some broad, often somewhat generalized goal (such as exercising more often), you instead break down the goal into smaller, discrete steps - this is done at an almost granular level.

For example, instead of saying, "I'll exercise more," someone engaged in goal setting would say, "I'll jog for 15 minutes every day." Instead of saying, "I'll save more money, a goal setter would say, "I'll save $50 each week by cutting these specific costs."

By targeting smaller, precise goals, the idea becomes far more manageable. You're not making wholesale changes to your financial habits - you're just cutting a few specific costs. Breaking significant, seemingly impossible goals into easily accomplished tasks is a great way to break through our tendency to procrastinate. And that's more than half the battle when it comes to achieving significant life goals.

Goal Setting And The New Year's Financial Tune-Up

The New Year is right around the corner - so there's no better time than now to commit to a comprehensive financial tune-up. Yet, as mentioned above, it's important to incorporate smart goal-setting principles to maximize your odds of success.

When preparing to make your resolution, sit down and write out a list of your financial goals. The key is to be as specific as possible. For example, instead of "save more money," write out a list of daily steps to improve your budget - carpooling instead of driving to work or making lunch instead of buying it.

By assigning yourself small, quickly completed tasks, improving your finances becomes sort of a game - almost fun. It also creates a positive feedback loop - as you complete small tasks, you feel better about yourself and increase the odds of achieving the larger goal. Soon enough, you'll wonder why it took so long to start.

The Takeaway

The most significant impediment between us and better financial health is often simple inertia. So, when you design this year's resolution, start with the smallest, most manageable tasks first to build momentum. As you complete each one, you'll realize the power of goal setting.
With this approach, what once seemed like insurmountable financial hurdles will seem like minor speed bumps.

By welcoming the New Year with this structured, strategic approach to goal setting, you're not just making resolutions - you're setting the stage for a year of real financial success.