The first few weeks of a new year are always filled with new resolutions and good intentions to do better this time around.
Yet, by February, about a third of New Year’s resolutions are abandoned, according to study cited by Five Thirty-Eight. And if that sounds like the ghost of New Year’s resolutions past, you might be wondering if you are in fact a “resolutions person.”
However, the way New Year’s resolutions are structured does not make them optimized for success. Although you set a goal and work towards it all year, as humans our psychology isn’t really set up to sustain attention and motivation for that long.
So if you have a financial goal or money move you want to achieve in 2017 but seem always to fail at resolutions, it’s time to try another approach.
How to set financial goals
Here are some ideas for how to set financial goals you’ll actually follow through with in 2017.
1. Try quarterly financial goal setting
Staying on track with a new habit for a whole year is hard to do. And if you fail to uphold your resolution by say February, there’s little incentive to get back on track.
But choosing shorter time periods for goal setting and achievement can help you stay focused on your financial goal setting.
“Quarterly goals are helpful for checking your progress toward longer-term goals,” says Nance Schick, an attorney and conflict resolution coach. “For people who prefer short-term goals, quarterly goals can keep them in the habit of achieving.”
And if you ever get off-track, there’s a new start just around the corner — instead of nine months away. What’s more, quarterly financial goal setting can still be focused on a larger resolution for the year.
Say you want to pay off more debt in 2017, the most common financial resolution according to a recent Student Loan Hero survey. You can break that bigger goal into smaller, bite-size benchmarks for you to reach throughout 2017.
2. Set monthly money challenges
Instead of setting goals, you might have more fun trying to work on monthly challenges.
With a monthly challenge, you can choose a specific financial task you want to achieve in that month. Then you can spend a month intensely focused on achieving that task.
“For those that don’t have a super specific goal (and even for some who do), challenges can be a great way to motivate behavior change,” says Kerri Moriarty, head of company development at Cinch Financial.
“Small challenges with a clear measurement of success/failure are extremely impacting in encouraging habit change,” Moriarty adds.
Maybe you have a general goal that you want to work on spending less and saving more. Moriarty suggests that you try “no discretionary spend on Mondays or only using cash when you go out to the bar on the weekend.”
Monthly money challenges will be effective if you’re the kind of person who can more easily sustain a shorter burst of effort than stay on a year-long goal track. It also helps you mix it up and try different ways to improve your finances so that you won’t get bored.
And even if you fall short, you tried — and there’s always next month.
Lifehacker set a series of monthly money challenges throughout 2016. Their 12 challenges could give you some ideas to try out in the new year if you want to set some of your own money challenges.
3. Get an accountability partner
Human beings are social creatures. Turning goal-setting into a group event is a fantastic way to keep yourself motivated to work on your money goals.
“Use the buddy system when you’re making resolutions about money!” suggests Gary Swim of Swim Retirement in Wichita, Kansas.
“Find an accountability partner — whether it’s a spouse, a parent or a financial professional — someone who will encourage you to stay on track,” Swim explains.
Swim adds that you should “choose someone who is tough, but fair,” so you can get real, honest, and encouraging feedback you need to improve.
With a partner in financial goal setting, you’ll have support in working towards your money goals. Your accountability partner can also encourage you when you’re feeling down on yourself.
Most importantly, you’ll have someone asking about your goals, which can help you sustain the self-control to stay on track. And, you’ll have someone to help you brainstorm new strategies to try.
4. Optimize your money management systems
Failing at goals or resolutions can come as a result of the gap between the goals you set and your day-to-day habits.
“With many financial goals, we fail to achieve them because humans are wired to think short term, and we have to set up systems to actively get around that,” says Ryan Frailich, a financial coach and planner with Deliberate Finances.
If you have a goal to save up for a $1,000 emergency fund, for instance, you’ll need a plan for how to get there. But, you’ll also need the habits in place to follow-through.
So if you’re living paycheck-to-paycheck, you’d need to figure out how to get out of that cycle. And, how you can save money for a $1,000 emergency fund every two weeks when you get paid.
“One effective strategy here is automation,” Frailich says. “You’re far more likely to achieve it if you automate $42 per paycheck to go straight to that fund than if you have a strategy of ‘I’ll move what’s left at the end of the month.'”
Instead of having to regularly use your willpower to save, it happens automatically.
And, if you focus on your daily money systems first, rather than your $1,000 goal, you’ll easily see where you can improve, too. Maybe you can find ways to cut your monthly expenses. Or, you can practice resisting an impulse to spend frivolously.
With these small changes and tune-ups of your money systems happening, getting a $1,000 emergency fund would be a natural and beneficial byproduct of your work.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Rates (APR)||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!|
|2.58% - 7.25%||Undergrad & Graduate||Visit SoFi|
|2.99% - 6.99%||Undergrad & Graduate||Visit Laurel Road|
|2.57% - 6.39%||Undergrad & Graduate||Visit Earnest|
|2.57% - 7.25%||Undergrad & Graduate||Visit CommonBond|
|2.90% - 7.82%||Undergrad & Graduate||Visit Lendkey|
|3.11% - 8.46%||Undergrad & Graduate||Visit Citizens|
Student Loan Hero Advertiser Disclosure
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.