Did You Make a New Year’s Resolution?

Roughly 45% of Americans make New Year’s resolutions, according to a University of Scranton survey published in the Journal of Clinical Psychology, yet just 8% of us stick to the program for 365 days. During the first two weeks of the year, 75% of people keep their resolutions, but by February, only 64% are still working toward their goals. By the six month mark, more than half have thrown in the towel.

This Year, Don’t Make Resolutions—Create Habits sheds light on why so many resolutions go up in smoke. The article suggests that rather than make big changes, we should focus on establishing new, sustainable habits. That is, a new behavior, whether it’s swearing off sugar or saving more money, can be best established if we integrate the change into our daily routine over time. Importantly, the article points out that it takes 66 days on average to form a habit.

So, this year, don’t make resolutions to turn over a new financial leaf. Instead, commit to creating good money habits. If you’ve resolved to save more money, getting specific about your goal can also help you achieve success. That is, instead of aiming to “save more,” resolve to “increase my 401(k) contribution by 2%” or to “invest annual bonuses in a college savings account” or to “contribute half of any future raise to my 401(k).” Of course, automating your savings gives you a greater chance of reaching your goals. Attaching timeframes to your goals can help as well. For example you might resolve to “Save $5,000 for vacation by July 15” or “Make the maximum contribution to my IRA by April 15.”

Finally, while working with a trusted advisor can keep you on track, sharing your resolutions and checking in with a spouse or friend can also be helpful.

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