4 Ways You Can Make 2018 Your Best Financial Year Yet

long-term financial goals

As the holiday season comes to an end, many of us will be looking ahead and making resolutions about how we will do things differently in the coming year.

Perhaps you’re making some long-term financial goals right now to ensure the new year is more stable and prosperous than the year before.

Unfortunately, many New Year’s resolutions created in the last few days of December are promptly forgotten or thrown out before January is over. And the reason why so many people fail at upholding their resolutions is that they don’t take into account the difficulty of habit change.

Thankfully, the study of behavioral economics and the psychology of habit offer insights into how to make resolutions that stick.

How to forge long-term financial goals

If you want to make 2018 the year you reach your long-term financial goals, use the following finance tips for creating your resolutions.

1. Recognize what’s valuable to you

Sometimes when we set New Year’s resolutions, we forget to consider the things we might be giving up to meet our goals.

For instance, let’s say your resolution is to meet a few saving goals for the year. And you plan to reach that goal by giving up all unnecessary spending–from your morning latte at your favorite coffee shop to weekend getaways with your friends.

If you don’t truly value barista-made coffee or traveling with friends, then giving up spending on those things will be easy to do. But it’s likely that you spend money on them for a reason, therefore trying to quit them cold turkey will be incredibly hard.

So before you decide to cut back on your spending, look back on the purchases and experiences that were the most meaningful, enjoyable, or valuable to you over the last year. That will help you recognize where you want to spend your money over the coming year.

Then, cut your spending on things that don’t matter as much to you. That way, you’re less likely to waste money on things that are less important to you.

2. Automate your goals

After you’ve identified what you value in terms of saving goals, start automating your finances around it.

For instance, if you love going to an annual music festival like Coachella but you struggle to pay for it, set up an automatic weekly transfer of money into a savings account for it. That way you have enough time to save up for it and your budget isn’t completely wrecked by it either.

Creating such an automated system for the experiences and purchases that you get the most out of will leave you much more mental bandwidth to focus on your long-term financial goals.

For example, since you know that Coachella will be paid for, you can focus on how to pay off your student loans, save up for a down payment, or increase your retirement savings.

3. Make your resolution an identity-based habit

Setting a big goal to accomplish for yourself in the new year can help you push back on your self-imposed limits at times.

However, you also need to establish new habits to achieve your big goals. And forming a new habit can be very difficult.

For example, imagine that you want to pay off all of your debts in 2018. And, on top of that, you resolve to quit using your credit card.

In the month of January, you put your credit card away and hustle to send extra money to all of your creditors. But then a snowstorm in February leaves you housebound and bored, and you end up going on an online shopping binge.

Once you’ve done that, it’s incredibly hard to put the credit card away again. Not to mention hustle to pay off your debts.

So instead of creating a large goal, habit and behavior expert James Clear recommends that you create identity-based habits for yourself to reach your goals.

To do this, you first need to decide what kind of person you want to be. Then, work to prove to yourself that you are that sort of person with your actions.

For instance, if you want to get out of debt this year, you could resolve to be the sort of person who sends an extra payment to your creditors each week. No matter how small.

Each time you send an extra couple of dollars to your student loans or credit card company, you are reinforcing your view of yourself as the sort of person who works to pay off debt each week.

Those weekly actions become a habit, and you slowly become the person you have decided to be. Over time, you end up reaching your long-term goals. Not a bad plan, right?

4. Forgive your slip-ups

Resolutions often fail because we tend to think of them as all-or-nothing.

For example, if you cheat on your no-credit card resolution, you may feel like you’ve failed altogether. And once you’ve slipped up once, you may feel like you might as well keep on going and charge more to your credit card since you’ve already faltered once.

This also plays into dieting, too. Psychologists refer to it as counterregulatory eating, but it’s more commonly referred to as the “what-the-hell effect.” After you’ve broken your diet once, it’s easy to think “What the hell! I might as well continue to!”

The only way to deal with this effect is to recognize that you will falter sometimes. The “what-the-hell effect” upon any resolution comes from the mistaken belief that we need to be perfect in order to make progress on our long-term goals.

But consistency is far more important than perfect behavior. Recognizing that slip-ups do happen allows you to continue to work towards your goals, rather than give up altogether.

When you do make a mistake, acknowledge that you messed up, forgive yourself, and move on. All the slip-up indicates is that you are a human being.

Reaching your 2018 financial resolutions

Real change is possible for all of us. But it takes more than a resolution that this year will be different!

To meet your long-term financial goals for 2018, take the time to protect the spending that is most important to you and create an automated savings system around it.

Also, figure out what kind of person you want to be, and commit to being kind to yourself when you make a mistake. And, consider performing a year end review to see what worked and what didn’t this year.

These are the best ways to make sure that the changes you want to make in 2018 will stick around until 2018.

Interested in a personal loan?

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LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal LoansFixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 4.98% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 21, 2017 and are subject to change without notice. Not all rates and amounts available in all states. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 4.98% APR assumes current 1-month LIBOR rate of 1.34% plus 3.89% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000
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4.98% - 14.24%1$5,000 - $100,000
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8.00% - 25.00%$5,000 - $35,000
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5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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