Picture this: My husband and I are squeezing in workouts by power walking at the gym where our daughter’s swim team practices. Normally, the brisk walks get our heart rates up and, after several laps around the indoor track, we’ve broken a sweat. In January, though, we find ourselves dodging the frenzy of resolution-makers who have swarmed the place. Cardio machines? All taken. Dumbbells? Not a single one in sight. Yoga studio? Downward dogs as far as the eye can see. Everyone is trying their hardest to stick to their New Year’s resolutions.
Come mid-February, though, it’s a whole different scene. We’re back in our zone, the gym is quieter, and those New Year’s resolution regulars? Well, they’ve mostly vanished. And that’s the cycle of resolutions, whether of the fitness or the financial variety. Research shows that just 19% of people who make New Year’s resolutions stick with them. But how can we improve those odds, and stick to New Year’s resolutions? By tweaking our approach. Here are five tips I give to clients to help turn flaky financial resolutions into sound money habits.
#1 When It Comes to Sticking With Your New Year’s Resolution, Don’t Shoot For Perfection, Aim For Improvement
In my experience, the main reason people fail to make good on their New Year’s resolutions is they’re trying to fix too big a problem, too fast. Is it realistic to eliminate $50,000 of debt in one year? Probably not, unless you’re willing to move in with your parents and live on ramen for a few years. That goal is just too big, requiring too many sacrifices. And because it’s so hard, you’ll have to renegotiate with yourself every day to stay the course.
Former President Barack Obama used to say about policy, “Better is good.” I believe that’s true about finances, too. Bite off just the amount you can chew. When it comes to how to stick to your New Year’s resolution, Instead of aiming to wipe out your debt completely this year, set a more realistic goal (depending on the amount). Chip away at your debt consistently, leaving enough room in your budget so you don’t feel deprived and putting yourself on a sustainable path to becoming debt free.
#2 Put A Face To Your Goals
Another big reason for not keeping New Year’s resolutions is because they’re too vague. After all, what does “save money” or “lose weight” mean? Is a five-pound weight loss enough to feel that you’ve made progress, or do you need to lose 10 or 20 pounds? It depends, of course.
Unless you specify exactly what you mean — and have a way to measure it — you’ll always be wondering if you’ve met the mark. Eventually, you might abandon your resolution if you aren’t sure you’re making progress.
That’s why I encourage my clients to be as specific as they can. Instead of saying, “I’m going to save more money,” make it something like, “I’m going to save $50 a week so I can go on vacation next year.”
I also encourage my clients to articulate why they’re doing what they’re doing. For instance, one of my clients is undergoing infertility treatment involving costly procedures that often need to be repeated before they succeed. To keep herself motivated, she has placed little baby bootie stickers on her credit cards and her computer monitor. Now each time she reaches for her card or wants to buy something online, she stops and thinks whether it’s worth it.
#3 Believe In The Power Of Small
Just as thinking too big can doom your resolutions, so can underestimating the impact of small changes. No amount of progress is too small if it moves you toward your goal.
Take raises, for example. Let’s say you get a 5% raise this year. If you commit to putting 1% of that into savings, that could add up to thousands of dollars in a short time. After a decade or more, those sums — especially if they’re invested in growth stocks — can become substantial.
This approach isn’t just about seeing more zeros in your statements; it’s about cultivating a mindset of disciplined, incremental progress. By focusing on manageable steps rather than grand overhauls, you’re setting yourself up for sustainable financial growth without compromising your day-to-day comfort.
Try finding a handful of small changes you could take on this year. Here are a few suggestions: Pack your lunch one extra time each month; cut out one streaming service; bring your own snacks to a movie; and reduce your energy bill by $10 a month.
#4 Bundle Your Temptations
One way to make changes is to pair something you want to do with something you should do. It’s something behavioral scientists call “temptation bundling.” For example, when it comes to exercise, tell yourself you’ll only listen to your favorite podcast or audio book during a workout and at no other time. Think of it as a carrot, rather than a stick.
This can also work for your money. Most people probably dread having a monthly budgeting meeting with their spouse… But what if you pair this chore with that excellent bottle of pinot noir you’ve been wanting to try and a mouth-watering dessert? If you’re single, get together with a good friend for budgeting sessions and accountability. That makes your budget a bit less onerous and may even make it something you look forward to.
#5 Stay Flexible
No matter how much planning you do, life always has other ideas. If you’re finding it difficult to stick to your New Year’s resolution, don’t beat yourself up, it happens to everyone. Just remember that one slip up doesn’t have to derail all the great progress you’ve made. The main thing is getting back on track. The faster you do, the more likely you are to stick with your resolution.
Let’s say you’ve been saving like a boss all through January and February, socking away money in your emergency savings and even contributing to a 529 plan for your kids. But in early March your kid’s sports activities kick into high gear. Suddenly, you’re driving all over the county, going from one game to another. With so little time, you’re eating out more and more and blowing up your dining out budget.
Just because one category of spending got turned upside down, doesn’t mean all is lost. Look elsewhere in your budget to make up the difference, perhaps shortening your summer vacation by a day or two or staying in a cheaper hotel. Then get right back to your saving program when things settle down.
The Bottom Line
There’s nothing magical about January 1 to make you want to turn over a new leaf. But it’s as good a time as any to make lasting financial changes. Remember, the path to financial success isn’t about grand, unrealistic leaps; it’s the steady, thoughtful steps that add up over time and bring about real change—regardless of the date on the calendar.
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