Many people make lofty New Year’s resolutions every year, only to give them up quickly. Only about 8 percent of resolutions are kept, according to Statistic Brain‘s look at a University of Scranton study. Gym membership cards begin collecting dust by February; the hopes of becoming a marathon runner become painfully dashed, and the diet goals start to fade. The same holds true for many financial resolutions, usually made in good faith and with the best of intentions.
If you haven’t made any resolutions, then congratulations: you haven’t failed at your goals. If you have already made resolutions, it’s not too late to change or ditch them completely. To make life easier, MyBankTracker presents some resolutions you can just skip altogether.
1. Resolutions without a plan or a goal
Don’t bother with vague resolutions that don’t have a clear objective with decisive steps to reach that goal. It isn’t useful to make statements such as “I want to save more money” or “I want to pay off my mortgage early” if you haven’t laid out clear steps to meet those ends.
If you want to save more money, it’s probably a better idea to pick a target amount, open a new savings account, and set up direct deposit. A separate account will help you monitor your progress and make it less likely you will spend from the account. Be sure to skip the debit card for the new account, or cut it up when it arrives.
If paying off a mortgage early is the quest, then do some calculations about how much you can realistically afford to put down as an additional payment every month. Or begin to actively look into refinancing into a loan with a shorter duration than the current mortgage. Rates are still low and lenders are looking for business, so it’s not too late to refinance some of that mortgage debt away.
2. Setting goals that are too rigid
Just as it’s not a great idea to set vague resolutions without steps or plans, it doesn’t make sense to make plans that are so tight that you’ll only be setting yourself up for failure. If the goal is to save $2,000 by the end of the year, then focus on the end result without too much emphasis on monthly or weekly payments.
Weekly payments of around $40 will make the goal a reality, but if you’re likely to give up when issues arise and the payments can’t be made regularly, then it can become an unreachable goal and you might throw in the towel. Instead, monitor the end over the means. Give yourself some flexibility and seek to pay about $40 a week on average, so that skipping a payment here and there can be made up with higher payments into savings later on.
3. Resolutions made for the wrong reasons
Making promises to others out of peer pressure is often a path to failure. Financial resolutions made without a genuine desire to meet those goals is as likely a path to failure as the path junkie takes when promising others he or she will quit taking drugs, even while mentally daydreaming about how good the next fix will feel.
Resolutions made without any genuine dedication to the goal aren’t going to work, so skip them. Don’t promise it if you don’t really mean it.
4. Setting unrealistic financial goals
Pass on the resolutions that are so drastic and hard to do that you’re going to give up on them quickly anyway. If your financial resolutions squeeze your budget so hard that you’re going to be miserable, then it’s better to adopt a better strategy or skip the resolution completely.
For example, if you want to cut back on going out to eat or luxury goods, then resolve to do it gradually. If you go out to eat three or four times a week, then cut the outings back by once a week over several months. This will give you time to adapt to developing new grocery shopping and home cooking habits while you also grow accustomed to the pleasantries involved with going out.
At first, you may miss the flurry of activity in restaurants, the lack of after-meal clean up, and the interaction with friends, family, the staff and crowd. By pulling away gradually, the sting won’t be as strong, and the additional work at home won’t be as overwhelming. Otherwise, skip the resolutions and avoid the misery.