You might have created a monthly budget, stopped frittering money away and started building an emergency fund. But with February round the corner, sticking with your financial new year’s resolutions is becoming trickier, right?
80% of new year’s resolutions are broken by the second week of February. So how can you beat these odds and make yours stick through to the end of December?
You need a goal
The problem with many new year’s resolutions is that they’re too vague. Saying you want to “save some money” is all well and good. But if you’re unsure why you’re doing it, it’s easy to give in to temptation once the going gets tough.
Why let your money gather dust in your savings account when Asos is having a flash sale? You can always get back on track next month, right?
If you want a better chance of succeeding, you need goals. And they should be as specific as possible. The best goals follow the SMART technique. They’re:
In other words, set a clear goal that’s doable and give yourself a reasonable time-frame to reach it. You should also be able to track your progress (we’ll talk more about this in a minute). So, instead of “saving some money,” you could resolve to “save £500 for a trip to Paris in 9 months.”
Once you’ve set your goal, write it down and keep it somewhere you can see it — in the notes app on your phone, for instance, or on a piece of paper under a fridge magnet. According to a 2016 psychology study, writing down your goals makes you 42% more likely to achieve them.
Are you being too ambitious?
A lofty goal, such as saving £20,000 for a property deposit in two years, can seem easy when you’re full of festive cheer (and a few extra glasses of Prosecco). But in the cold light of February, you may start feeling discouraged and perhaps even overwhelmed.
For starters, £20,000 is a lot of money. Probably more than you’ve ever set aside in your life.
But, more to the point, our brains are wired to prefer instant gratification over long-term rewards. So, the further your goal is in the future, the harder it’ll be to stick with it.
For this reason, it’s worth breaking down large goals into smaller, more manageable ones. Change your goal to “setting aside £100 a month for a property deposit” and it’ll suddenly feel much more achievable.
Automate. Automate. Automate.
Change is _ hard _ . So, set yourself up for success by making things as easy as possible.
When it comes to your financial new year’s resolutions, you can take a lot of the effort out of the equation by using direct debits and standing orders. You’ll need some time to set things up. But, once you’re done, everything will take care of itself and you won’t have to think about it.
Here are three ways you can use direct debits and standing orders to your advantage:
● Set yourself a monthly savings goal? Set up a standing order so the money’s transferred to your savings account, ideally on the same day you get your salary
● Resolved not to get into any more credit card debt? Pay by direct debit and set it so it collects the full balance due, rather than the minimum monthly repayment
● Want to get a handle on your bills in 2019? Open a separate bank account and set up a standing order that transfers enough money from your salary to cover your bills each month. Once that’s done, start paying your bills by direct debit
Check in regularly… but not too often
Monitoring your progress is important, because it helps you make sure you stay on track. Plus, seeing your goals inch closer keeps you motivated.
But monitoring can also backfire if you do it too much. This is because you won’t be allowing enough time for meaningful progress, which will make you think you’re not getting anywhere.
As a rule, you should check in on your goals about once a month. This way, you’ll see small but noticeable changes — another £50 off your credit card debt, or £100 extra in your savings account — which will encourage you to keep going.
Slip ups can happen… be kind to yourself
Let’s say you resolve to stop making impulse purchases in 2019.
For the first few weeks, you’re fine. But then you come across your favourite band’s limited edition vinyl box set and, before you know it, there’s £200 on your credit card.
So now, you’re telling yourself “That’s another new year’s resolution down the drain. Oh well, I tried…”
Sometimes, we tend to think of new year’s resolutions as all-or-nothing situations. In other words, if you slip up once, you’re done.
For this reason, a change in mindset can make a huge difference to whether your resolutions stick. Think of it this way. It’s not about the destination. Or even about the journey. Ultimately, what matters is that you’re going in the right direction.
So by all means, set specific financial goals, make sure they’re doable and work hard to make them stick. But if you do slip up, it’s not the end of the world. Get back on your feet and continue from where you left off. It’ll get easier as you go.