It’s a new year, and you know what that means: Financial New Year’s resolutions!
While many people may try to lose weight or read a bunch of books in the new year, others may focus on financial New Year’s resolutions. That could include getting debt under control, or firing up a retirement account. Whether you’re planning on cutting down on your spending, increasing the amount you are saving, or start investing, the most important thing you can try to do is stick with it.
In a previous New Year’s-related blog post, we shared this:
A study published in 2021 in the International Journal of Environmental Research and Public Health found that 64% of people abandon their resolutions within a month. That means that two-thirds of those who set goals for the new year couldn’t stick to it for even four weeks.
Here’s more: Research analyzing 800 million user-logged activities in 2019, found that January 19 is the day that most people give up on their New Year’s resolution. It’s called “Quitter’s Day.” Another study, from researchers at the University of Scranton, found that 23% of people give up on their resolution after just one week.
This should give you an idea of what you’re up against if you’re aiming to stick to your financial New Year’s resolutions. So, how can you do it — the Money Vehicle way?
Financial New Year’s resolutions – the Money Vehicle way!
One thing that the Money Vehicle team and the Money Vehicle course harps on is the importance of setting realistic and attainable goals. We call this “R.I.C.H. Goals,” and here’s the rundown of what that means: Reachable, Individual, Controllable, and Happy Goals.
Reachable: What can I achieve?
Everyone wants an ideal outcome, and this is where your conversation should start. What is the best-case scenario? You need to take a step or two back and think about what is achievable from where you are today.
For example, what is more achievable?: “I want to save $1 million,” versus “I want to have $5,000 saved by the end of the year.”
Your goal must be something that you can actually attain with the resources available to you. Setting out on a journey, you will run into obstacles that will try to persuade you that the path is too difficult, and that you should give up. Often, that first obstacle is an unrealistic goal that you set for yourself.
The only way you will carry on is if you are convinced you can reach your goals. So, set them wisely!
Individual: What do I want?
This is the time to be selfish; to begin to really visualize why you are going to change your habits. This has to come from you — it cannot be your parents’, teachers’, friends’, or anyone else’s goal. This has to be something you want to change.
Your goal must be something that you truly desire, and that will become your response as to why you are prioritizing this choice. Whatever your goal — attending a concert, buying a car, or going on a trip to the Caribbean — it must be your purpose and your goal.
Controllable: What do I control?
If you are not in the driver’s seat, your Money Vehicle won’t go where you want it to go. Factors outside of your control will always affect your life, and the trick is to focus on what you can control. That’s the key!
This “mow-your-own-grass” mindset means that you focus on your own backyard and not waste time and effort focusing on what’s going on with your neighbor’s backyard. It is amazing how things take care of themselves when you take care of what you can control.
Happy: What makes me smile?
Most importantly, perhaps, is that your goal makes you smile at the end of a long day — the results make you happy. When you close your eyes and visualize your goal, you should feel a sense of contentment, but also a deep sense of purpose.
Whatever goal you define must bring joy into your life — if it doesn’t, then why are you chasing it, anyway? If the path leads to your own well-being, you will be able to enjoy every step of the journey.
R.I.C.H. Goals and New Year’s Resolutions
Combining what we know about New Year’s resolutions (that they’re prone to failure!) and our R.I.C.H. goals method of goal-setting, it may be beneficial to try and use the goal-setting framework to try and nail down and stick to your resolutions. Note, too, that this doesn’t need to be related to resolutions — you can and should be setting goals all the time. When it comes to your finances, it’s typically better to act sooner rather than later!
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And check out our white paper: “Strategies for Increasing Financial Literacy Rates Among High School and College Students”
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