The Mental Side to Meeting Your Financial Goals in the New Year

The Reality About New Year’s Finance Resolutions

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Millions of people make New Year's resolutions each January, and about 60% of these goals are related to money or finance, according to data from the Pew Research Center. 

This trend in New Year’s finance goals is a testament to the importance of financial health, but with these types of goals comes the added pressure to “succeed.” If your year doesn't go as planned, it’s easy to feel like you’ve fallen short and there’s no point in trying again.  

An article published by The Ohio State University sheds some light on the completion rates for New Year’s goals. About 43% of people quit their New Year’s resolutions by the end of January, and only 9% actually complete their resolutions each year. 

While these statistics may feel discouraging, it’s helpful to know what you’re up against so you can fight the urge to give up. There are many ways to tackle your goals in a strategic manner and create systems that give you the highest probability of success. Creating a framework that will encourage you to get back on track if you deviate from your original goal is critical. It’s also helpful to reflect on your mindset about money, which will better inform your goal-setting system. 

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Reflect On Your Emotions Around Money

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Like many challenges in life, there is often an emotional side to your finances. An article from the Financial Health Network highlights research on the connection between financial and mental well-being. Your finances can have a very strong effect on your emotional health and vice versa. While there will always be factors outside of your control, there are ways to guard against falling into a negative money mindset. 

Do you struggle with putting impulsive, luxury purchases on credit cards? Does fear of spending prevent you from using money for fulfilling experiences? This is when a smart financial plan becomes very important. Establish a system for yourself that creates positive reinforcement and allows you to stay focused on your successes instead of your perceived failures. You’ll be well on your way to reaching your New Year’s goals. 

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Increase Your Probability of Success

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So, how do you create a system that helps you meet your financial goals? 

One large goal can become overwhelming and feel too big to tackle. Setting progress goals or monthly check-ins can make the difference between feeling successful or not. For each annual goal you set, break it down into quarterly, monthly, weekly, and maybe even daily amounts and give yourself tangible milestones to reach.  

You can also focus on the outcomes rather than dollar amounts. Reframing your mindset to consider what you are adding to your life rather than what you are sacrificing can help you stay the course when things get hard. Forgoing some unnecessary wants each month will help you build up that overall financial stability you’re hoping for by the end of the year. 

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How to Stay Motivated When Progress Feels Slow

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There may come a time when you’re tempted to give up, but you haven’t met your goals yet. Just like physical health, financial health is about consistent, small changes over time that lead to real results. Motivation will look different for everyone, but consider the following suggestions when things get tough:

• Participate in a challenge: Pick a topic you’d like to focus on like budgeting or savings and then build a challenge to motivate you around it. Some options include a “no-spend” challenge for a period of time or the “pantry challenge” where you use up what’s in your pantry before going to buy more groceries. For those trying to save, roll a die and try to save that much money for the day or commit to saving $1 the first week and increasing it by $1 weekly.
  
  
• Allow yourself rewards: It’s okay to treat yourself, but don’t allow those rewards to get you off track. Try to stick to non-financial rewards as much as possible, and if you choose a splurge, make sure that it is a small percentage of your goal. For example, if you saved $100 in groceries, treat yourself to a $5 or $10 reward.
  
  
• Find an accountability partner: Talk with your spouse or a friend about your financial goals and help each other to make good choices when things get hard. Check in with one another and celebrate each other's successes. Online financial communities can also be great places to find inspiration and solidarity with others that are on similar journeys.

Know yourself and build the tools and systems you need to stick with your financial goals. With consistency and hard work, your goals are absolutely possible to achieve.

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If you are interested in more in-depth financial advice, schedule a call with our team.

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