4 Financial New Years Resolutions that are (almost) Guaranteed to Fail

If you’re like most people, you’re making some financial New Years resolutions right about now.  You’re thinking about ways to improve your finances.  You’re vowing to “stop worrying about money” and make some real changes—but resolutions are likely all you’re making.

Real change comes from something else—something deeper—and it usually requires some new information and a little bit of fun to make the journey to achievement enjoyable.

You absolutely can improve your finances.  You can stop worrying about money.  You can make a difference in your productivity and profitability—but not by making financial New Year’s resolutions.

Research shows time and time again, if you simply make a New Years resolution, you’ll quit:

  • 25% of people who make New Years resolutions quit trying to meet them within the first week of making them.
  • 60% quit within six months.
  • 95% of those of you who vow to lose weight will regain it.

In fact, losing weight is one of those New Years resolutions people vow for ten years or more right about ball drop time.

To win at what you want, at the very least, you’ll have to start by transforming the New Years resolution idea into an annual goal setting exercise.

Goals are real.  People meet and exceed them.  There are markers to indicate where the goal line is.

With goals, there are aims and outcomes.  There’s a target—something to shoot at or for.  Somebody, somewhere, writes all this down. In fact, by the simple act of writing down a goal, you are 42% more likely to meet it.

Effectively managed goals can certainly motivate and inspire people to expand their happiness and achieve new results that bring them closer to winning at what they want.

There is a science of goal-setting!  You’ve got to get your brain to let you do the thing you want to do by making your goals fun and achievable.

New Years Resolutions 2

Here are some examples of reframing bad financial New Years resolutions with their more enjoyable (and achievable) counterparts:

#1 Bad Financial New Years Resolution:

To save more money, some people put themselves on a scarcity budget.  This is one of those financial New Years resolutions that activate fear and deprivation.

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MORE Enjoyable & Achievable Counterpart:

I recommend automating as the way to improve your finances.  This is something I’ve discussed here, and still swear by as the best way to ensure success. Make small changes over time to get closer to your savings goals.

#2 Bad Financial New Years Resolution:

In order to save money for college, some parents feel they need to make a financial New Year’s resolution to reallocate money from their retirement savings and allocate it to their children’s education savings.

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MORE Enjoyable & Achievable Counterpart:

Make sure the kids won’t have to rely on you later by taking care of yourself financially and making certain retirement funds get the longest exposure to compound interest that’s possible for you.

Instead, encourage your kids to start their own college savings accounts.  Help them find and plan for jobs and internships that further their academic interests.

Maybe plan to go together to the Foundation Center library and research the kinds of grants and scholarships available to them.  Help them write their applications.

This kind of self-reliance and financial goal setting is invaluable, and will help your child so much more than risking the possibility of becoming a financial burden to them later by diverting retirement funds.

#3 Bad Financial New Year’s Resolution:

In order to get all they can from the rise (people seem to forget about the fall) of the market, some make the bad financial New Year’s resolution to leave their 2014 tax obligation invested in the market until April 14th, 2015.

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MORE Enjoyable & Achievable Counterpart:

Putting what you know you’ll owe Uncle Sam in an interest bearing savings account—you might not get (as) much return, but at least you know the funds are set aside, protected, and available to cover your tax debt. New Years Resolutions Concept

#4 Bad Financial New Year’s Resolution:

In order to recognize a maximum return, some people might consider making a bad financial New Year’s resolution to invest what they’ve saved for a house down payment, planned for 2016, in the stock market.

**This is not recommended.  It’s too risky.  I advocate a minimum investment timeline in the stock market of at least five years.

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MORE Enjoyable & Achievable Counterpart:

Instead, Put at least two-thirds of that money in CDs or an interest-bearing savings account.

Sure, while stock market investments might climb nicely, capital gains taxes will take some of all growth. But, the real risk here is downward market movement.

The global stock market has always grown over time, we just don’t know how much time it needs and where we are in its cycle.

Just imagine how you’d feel if your $200,000 down payment turned into $150,000 come close of escrow.  Not worth the risk….

New Years Resolutions 3Again, let me assure you…

(that’s me over there assuring you!), you absolutely can improve your finances.  You can stop worrying about money.  You can make a difference in your productivity and profitability—but not by making bad financial New Year’s resolutions.

If you’re like most people, I know you’re sincere in your desire to transform the way it was last year, to the way you want it to be this year.  I know you’re ready to keep that vow to “stop worrying about money” and to make some real and lasting changes in how you do your moneyed life.

Stick with me, here.  I’ll keep offering you a little bit of fun to make the journey to achievement enjoyable—and the best “got your back” financial know how I’ve earned from all these years in the wealth management game.  If you’re ready to play to win, I’ll show you how….

Please note: I reserve the right to delete comments that are offensive or off-topic.

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