Keeping Your New Year’s Resolutions
We all make them. And we all break them. What is it about New Year’s Resolutions that are so hard to keep?
If your New Year’s Resolution is to pay down your debt, here are some ideas to help you succeed. (If your Resolution is to lose some weight, well, good luck with that.)
Based on my own experience, I think there are three reasons why we don’t make good on our goals — New Year’s, personal finance or otherwise:
- Most goals are too general and vague. Don’t promise yourself, “I’m going to pay down my debt.” Working towards a goal like that is nearly impossible. Imagine running a race with no finish line! Instead, set a specific debt reduction objective, like “I’m going to reduce my credit card debt by $5,000 this year.” By setting a specific, objective goal, you can check your progress and pace yourself.
- Most goals are too extreme. Olympic athletes train for years, even decades, to perfect their art. New Year’s Resolutions only get a single year. The more reasonable your specific objective, the more likely you are to follow through. It’s okay to push yourself, but don’t make your personal finance goal so unattainable that you won’t even try. If it’s impossible to pay off all your debt in one year, don’t make it your goal. Just set a goal to pay off part of it. Paying off debt usually requires sacrificing in some other area. Maybe make a goal to save money by eating out three times a month instead of five. Whatever the case, small progress is still progress. If you do better than projected, great! If not, you still met your goal. Completing small goals makes a big difference!
- Most goals have no accountability. The best way to be accountable to yourself is to get organized: set personal deadlines. If your overall goal for the year is to pay off $5,000 of debt, then set a deadline each month to reduce your debt by $417 (the monthly equivalent of $5,000 in a year). Write down your progress each month, post it on the refrigerator. Unless you actively track and assess your progress, it will be very difficult to succeed.
