Whether you’re setting a new year’s financial resolution or a personal money goal, it’s easy to start with enthusiasm but end up abandoning it too soon. Shockingly, statistics reveal that about 43% of individuals quit within the first month, and only 9% who make resolutions complete them.
We explore the reasons behind the demise of early resolutions and discuss practical and smart money strategies for setting and achieving realistic goals.
1. Recognize the Pitfalls of Unrealistic Resolutions
We often fail because we attempt too much too soon. Whether it’s paying off debt or limiting spending, expecting instant transformations is unrealistic.
Think about physical fitness resolutions – it’s crucial to acknowledge that people didn’t become couch potatoes or gain 5 kgs overnight. Similarly, accumulating debt didn’t instantly happen. It was due to every day choices over a period of time. So make realistic resolutions, and plan on gradual steps and tools for follow-through to avoid becoming a statistic.
2. Consistency Trumps Quantity
Small, regular actions trump large, sporadic efforts. For one, they are manageable and you’ll be less likely to abandon them. Two, establishing a habit through consistent actions builds momentum, making it easier to increase effort over time.
Once again, using the fitness analogy, walking for ten minutes daily consistently is more impactful than running 5 km on day one and giving up. Go big or go home is a nice soundbite but it rarely works when achieving a goal.
3. Avoid Overloading Goals
Setting too many goals overwhelms and spreads willpower thin. It’s important to recognize that willpower is finite – we only have so much energy towards self-control so it’s vital not to bite off more than one can chew. Focus on one or two achievable goals, and it will ensure a higher likelihood of success.
4. There’s Power in Planning
Creating an action plan is crucial for success. And the best way is to script out behavioural steps so you’re prepared to navigate obstacles and resist impulsive decisions during emotional moments. For example, if you were planning to stick to a diet, plan ahead for social events or restaurant outings. Similarly, if you’re sticking to a budget, play out how you’ll behave in a shopping mall if you see something you really like.
5. Keep It Simple
Simplicity is key, especially when dealing with financial goals like paying off debt or investing. The more complex you make it, the more likely you’ll give up or procrastinate in revisiting the task. Breaking down complex objectives into manageable steps makes the journey more achievable.
6. Investing Wisely
For those resolving to invest more, understanding the basics is crucial. Seek guidance, diversify investments, and start small if needed. A well-informed approach, rather than impulsive decisions, will contribute to financial growth.