Have you ever said something like this on January 1: “This year I’ll ____,” and then given up by February? Well, you’ve got company: A popular figure kicking around is that 80% percent of New Year’s resolutions fail!
How is this possible? Is it just that we need a little more energy or willpower?
Nope. In fact, whether a resolution will be hard to keep comes down to if it includes a few key details.
Who knew? Well, after a quick read, you will. And you’ll know what it takes to make financial resolutions you’ll keep.
New Year’s is usually when people talk about making resolutions. But regardless of when you make resolutions – like cleaning your entire home in the spring or resetting your budget after a splurging over the summer – some key details could determine if you’ll follow through.
For starters, if goals are any or all of these things they can be harder to achieve:
Keep these goal-setting criteria in mind as you move through the next steps. There are a few more things to consider when you’re coming up with resolutions that’ll stick around.
If you have a general sense that you want to do “something” financial but don’t have a specific goal in mind, there are a few ways to get ideas flowing.
If your list feels long, here’s what you can do:
The next step to making resolutions that stick is creating roadmaps for them.
This is where SMART goals come in.
SMART goals are:
These attributes can make it easier to know what progress looks like and to keep moving forward.
Review company-sponsored benefits and see if they offer a 401(k) and a match
Open and fund a company 401(k) or open one through another provider
Explore Traditional and Roth IRAs, then set up automatic deposits to my IRA so I add funds every month, up to the annual limit
Establish a separate account for my emergency fund
Set up direct deposit of $200/month into my emergency fund
Review homeowner’s insurance policy and determine if more coverage is needed
Put at least 50% of my annual bonus into my emergency fund (It’s ok if it means exceeding your $5K goals)
It can be tough to stay motivated if a goal feels far away. So consider setting and celebrating mini-goals, like treating yourself to a meal out, when your emergency fund hits $500, and then again when it hits $700, $1,000, $1,200 and so on.
Celebrating each milestone gives you an opportunity to recognize and appreciate your hard work. It could also help you keep your momentum going.
Another way to get a boost? Tap your social network. You could post what you’re doing and have your network celebrate your mini-wins alongside you.
The idea here is similar to having a study buddy: Accountability can be a positive push towards your goal. Plus, you can return the favor and cheer friends on as they reach for their own goals.
If there are three things to take away from this resolutions review it’s this: Goals can be easier to reach if they meet specific criteria, if you have clear plans to reach them and you find ways to celebrate the process.
So who’s in?
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.