As the New Year approaches, many of us are excited about setting resolutions to improve our lives. For those with financial goals, the start of the year can be the perfect time to plan and strategize for a better future. However, just because people make a New Year’s resolution, doesn’t always mean they stick to it. In fact, estimates from Time Magazine show that as many as 80% of people don’t even make it to February.* What’s even crazier is that only a measly 8% of people will stick with their New Year’s resolution for the entire year.* For this reason, we’re sharing some effective strategies on how to set realistic New Year’s resolutions, and then actually stick to them.
Did you know that saving money and managing finances better is one of the most popular New Year’s resolutions?* In this finance-focused blog post, we will guide you through the process of setting achievable money resolutions and provide valuable tips to help you stick to them throughout the year, while answering questions about New Year’s resolutions along the way. So, let’s get started by first sharing how to set realistic New Year’s Resolutions.
How to Set Realistic New Year’s Resolutions
Determining how to set realistic New Year’s resolutions involves considering your current situation, capabilities, and resources. Below are some of the best ways to set realistic goals.
Reflect on Past Financial Decisions
Before you begin setting your financial New Year’s resolutions, take some time to reflect on your past financial decisions. Analyze both your successes and mistakes to understand what worked well and what areas need improvement. This reflection will provide valuable insights into your financial behavior and allow you to set more realistic and relevant goals for the upcoming year.
Prioritize Your Financial Goals
Once you have a clear understanding of your financial history, it’s time to identify your top priorities for the New Year. Start by listing all the financial goals you’d like to achieve, such as saving money, buying a house, or paying off debt. Then, rank them in order of importance based on your current financial situation and long-term goals.
Set Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) Goals
To make your resolutions more actionable and attainable, frame them using the SMART criteria. Instead of vague goals like “save more money” or “invest better,” create specific targets. For example, take a look at these resolutions:
- Save $5,000 in an emergency fund by the end of the year.
- Reduce credit card debt by 30% within six months.
- Contribute 10% of your monthly income to a retirement account.
By setting specific, measurable, achievable, relevant, and time-bound goals, it’ll help you form a clear roadmap to follow throughout the year.
Break Down Large Goals into Smaller Milestones
Large financial goals can be daunting and overwhelming. To maintain your motivation, break down these bigger goals into smaller, achievable milestones. Then as you reach each milestone, make sure to celebrate for positive reinforcement!
Create a Realistic Budget
Budgeting is a fundamental aspect of financial success. Review your income and expenses from the previous year to create a realistic budget for the upcoming year. Then, put a portion of your income towards achieving your financial resolutions. Prioritize savings, debt repayments, and investments in your budget, so that you’re progressing towards your goals consistently. If you’ve never created a budget before, consider trying out a budget calculator to get you started. There are tons of free online options to choose from such as this one here.
Track Your Progress Regularly
Keeping track of your financial progress is vital to staying on course. Set aside time each month to review your finances, comparing your actual numbers with your budget. This review will help you find any areas where you’ve strayed away from your budget, so you can take action as needed. Tracking your progress will also boost your motivation and help you remain committed to your resolutions.
Stay Accountable
One of the best ways to stick to your financial resolutions is to have an accountability partner. So, try sharing your goals with a trusted friend, family member, or financial advisor. Regularly discuss your progress with them and seek encouragement and advice when needed. Knowing that someone is there to support you can be incredibly motivating and can also help to keep you on track.
Educate Yourself
Financial literacy is crucial for making informed decisions. So, take the time to educate yourself about topics such as personal finance, investing, and money management. You can also attend workshops, read books, and follow reputable finance websites and blogs. The more you know, the better equipped you’ll be to make sound financial choices, helping you achieve your resolutions more effectively. For more on financial literacy, check out our blog post, “Financial Literacy: What It is and why It’s So Important”.
Stay Flexible and Adapt
Life is unpredictable, and financial circumstances can change throughout the year. So, it’s important to remain flexible with your resolutions and be willing to adapt when necessary. If unexpected expenses pop up, adjust your budget and prioritize the essentials. Being adaptable will help prevent you from getting discouraged when facing challenges, and it can also help you maintain your focus on your long-term goals.
Reward Yourself Appropriately
As you progress towards your financial resolutions, it’s crucial to acknowledge your efforts and reward yourself appropriately. Treat yourself to small indulgences occasionally, as long as they don’t derail your progress or compromise your budget. Recognizing and celebrating your achievements will strengthen your commitment to sticking to your resolutions.
Now that you’re up to speed on how to set realistic New Year’s resolutions, let’s address some of the most pressing questions people often ask. From crafting realistic goals to staying motivated, understanding popular resolutions, and looking for recommendations on personal development, we’re exploring them all! So, let’s navigate through the questions and provide insights that will guide you towards a successful and fulfilling pursuit of your New Year’s resolutions.
What Are the Most Popular New Year’s Resolutions?
Common New Year’s resolutions often revolve around topics such as self-improvement, health, and relationships. Some popular ones include the following options:
- Exercise more and get in shape.
- Eat healthier and maintain a balanced diet.
- Save money and manage finances better.
- Spend more quality time with family and friends.
- Learn new skills or pursue personal interests.
- Reduce stress and practice self-care.
How to Stick to New Year’s Resolutions
Learning how to set New Year’s resolutions won’t do you much good if you can’t stick to them, but sticking to New Year’s resolutions requires commitment and perseverance. So, try some of these methods to stay on track:
- Make your resolutions specific and measurable.
- Create a plan with actionable steps.
- Track your progress regularly.
- Stay accountable by sharing your goals with others.
- Celebrate small victories to stay motivated.
- Be flexible and adapt when necessary.
- Seek support from a trusted community, such as friends, family, or a support group.
What Are Some Financial New Year’s Resolutions?
Financial New Year’s resolutions could include:
- Creating a budget and sticking to it.
- Saving a specific percentage of income each month.
- Paying off high-interest debts.
- Investing in a retirement account or other investment tools.
- Building an emergency fund.
- Tracking expenses to find areas for improvement.
- Avoiding unnecessary impulse purchases.
Tips for Achieving New Year’s Goals
To achieve your New Year’s goals successfully, try out some of these tips:
- Set specific and realistic goals.
- Break down larger goals into smaller milestones.
- Stay disciplined and maintain consistency.
- Celebrate progress to stay motivated.
- Use reminders or apps to keep yourself on track.
- Seek guidance or mentorship if needed.
- Surround yourself with supportive and like-minded individuals.
How to Stay Motivated with New Year’s Resolutions
Maintaining motivation throughout the year can be challenging, but you can:
- Visualize your end goals and the benefits they will bring.
- Set up rewards for achieving milestones.
- Create a vision board or journal, so you can keep your goals in focus.
- Find an accountability partner or join a support group.
- Review your progress regularly, so you stay on track.
- Remind yourself of the positive changes you’ve experienced.
Healthy New Year’s Resolutions Ideas
Some healthy New Year’s resolutions include:
- Incorporating regular exercise into your routine.
- Eating more fruits, vegetables, and whole foods.
- Drinking more water and reducing sugary drinks.
- Getting enough sleep and prioritizing rest.
- Managing stress through mindfulness or meditation.
- Limiting screen time and instead spending time outdoors.
How to Make a New Year’s Resolution Plan
To create an effective New Year’s resolution plan, try some of the following ideas:
- Identify your specific goals and priorities.
- Break down each goal into actionable steps.
- Set deadlines for achieving milestones.
- Create a realistic timeline for the year.
- Allocate resources and support to help you succeed.
- Regularly review and adjust your plan as needed.
Best Books on Personal Development for New Year’s Resolutions
There are numerous books on personal development, but some popular ones include:
- “The Power of Habit” by Charles Duhigg.*
- “Atomic Habits” by James Clear.*
- “The 7 Habits of Highly Effective People” by Stephen Covey.*
- “Mindset: The New Psychology of Success” by Carol S. Dweck.*
- “Grit: The Power of Passion and Perseverance” by Angela Duckworth.*
New Year’s Resolution Statistics and Success Rates
The success rates of New Year’s resolutions can vary, but on average, around only 20-30% of people stick to their resolutions after six months. By the end of the year, the success rate drops even further. The reasons for success or failure are diverse and depend on factors such as goal specificity, support systems, and personal determination.
How to Create a Vision Board for New Year’s Resolutions
To create a vision board, consider the following ideas:
- Gather various visual elements such as images, quotes, and words that represent your goals.
- Arrange them on a poster board or a digital platform.
- Place the vision board in a visible location.
- Review your vision board regularly to stay motivated.
How to Set Realistic New Year’s Resolutions for Better Financial Habits
Financially-focused New Year’s resolutions may include some of the following strategies:
- Setting a budget and then sticking to it.
- Saving a certain amount of money each month.
- Paying off debts and avoiding unnecessary loans.
- Learning about investing and starting to invest.
- Building an emergency fund for unexpected expenses.
Setting reasonable New Year’s resolutions and then sticking to them requires dedication, planning, and perseverance. By reflecting on your past financial decisions, prioritizing your goals, and creating a well-defined roadmap, you can make serious progress in your financial journey. Remember that progress is not always linear, and there might be bumps along the way. However, staying focused, accountable, and adaptable can help you make steady progress towards achieving your financial aspirations throughout the year and beyond. Now that you’re equipped with the knowledge of how to set realistic New Year’s resolutions (and stick to them!), we wish you a financially successful New Year!
High-interest lines of credit can be expensive and should be used only for short-term financial needs, not long-term solutions. Customers with credit difficulties should seek credit counseling. The opinions expressed above are solely the author’s views and may or may not reflect the websites or its affiliate’s opinions and beliefs. Flexibility does not provide financial advice.
* This blog contains links to other third-party websites that are not endorsed by, directly affiliated with, or sponsored by Flexibility. Such links are only for the convenience of the reader, user, or browser.