Did you know that only about 8% of goals are actually achieved?
That’s research coming from the University of Scranton, that found that 92% of New Year’s goals are never met.
Not exactly inspiring for those of us looking to achieve a financial milestone in the upcoming year.
There is hope, however! There are a few principles you can apply to your goal-setting to help increase your chances of achievement. Check them out below and let us know how they help you in the new year!
Look at What You Value
Even if you know you should spend less money on eating out, if that’s the only way you get social interaction, and it’s a critical part of your identity, then it’s probably not going to be realistic to slash this from your budget. Turns out, our behaviors are way harder to change if they go against our beliefs and values.
Which is why it’s important to take stock of how our goals line up (or don’t) with our values.
Maybe eating out is incredibly important to you, and it would hurt less to cut the cable. Or maybe traveling is your number one priority, and you can make sacrifices in clothing or local entertainment.
If you’re not sure where to start in identifying if your goal lines up with your values, try asking yourself (and your spouse, if married), these questions:
- What motivates me to do things every day?
- What’s important to me and my family?
- Why is this goal important to me?
- What will this change mean to me; to my family?
- How will my life be better by achieving it?
Set Realistic Goals With Vision-Casting
Often when setting goals we skip right to the thing we want to happen. “I want to lose 20 pounds … I want to travel more … I want to save more money … I want to pay off my student loans, etc.” The problem with this type of goal-setting is that they fall short of illustrating what the impact will be on your life, i.e., the vision.
We don’t make a goal to pay off debt just for the sake of paying off debt. We pay off debt so that we can feel accomplished, happier and freer. We pay off that debt so we can use that money towards a different goal. We lose 20 pounds so that we can live longer, feel more confident, and have more energy. We save more money so that we can feel prepared to buy a house, get that couch upgrade, etc.
See what I’m getting at? The “so that” sentence is critical to setting the vision. Your goal is a defined step(s) that will help you attain your vision. This is an important distinction.
Vision 1: I feel financially cool, calm and collected.
Goal 1: Save $100 a month into an emergency fund by picking up a small side hustle.
Vision 2: My spouse and I are on the same page with our finances.
Goal 2: Set bi-weekly money dates to talk about budgets, goals, and how we’re tracking.
Vision 3: My student loans are no longer taking a huge chunk of my paycheck, or, the end is in sight.
Goal 2: Use a debt repayment calculator to see how long it will take me to pay off my loan(s), and how different amounts can impact that pay off date.
The other problem with some of the goals I mentioned earlier, like “save more money,” or “pay off student loans” is that they’re way too vague. Like I said, there’s a difference between vision and goals, and goals are just a series of steps that get you to your vision.
Break down your goals into specific numbers, actions or strategies.
For example, instead of “save more money,” you will want to get specific about how much exactly you need to save per month or per paycheck. Then, if with that number in mind, jot down ways that you can either cut spending in areas to get to that number, or make more money on the side.
If that even seems too big, break those down too. Studies show that even crossing off small, mindless tasks from your to-do list can boost your productivity and feelings of accomplishment.
Know Your Triggers (Both Good and Bad)
If you’re trying to lose weight, it’s a no-brainer to throw out all of your junk food because the sight of them can be a trigger to eating things you shouldn’t. The same principle can apply to setting financial goals. You have to know your triggers. One of mine, for example, is seeing friends on Instagram, eating out or buying new clothes. I immediately start justifying a need to go shopping or trying the latest restaurant. Because I know I do this, during times when I’m trying to tighten my belt, I try to stay off of social media.
That was an example of a bad trigger, but there can be good triggers too! For example, seeing your athletic shoes as soon as you get out of bed may be your trigger to go out for a run (i.e., eliciting a positive behavior).
Or, you can set up a reward system that helps you repeat the behavior, which leads to forming a positive habit. For example, you could give yourself a small treat every time you hit a saving milestone (I’m partial to a DIY face mask every time I add an extra payment to my student loan).
Bottom line is you need to know what helps and hurts you on your way to your financial goal. This knowledge will help you reinforce the good behaviors and avoid the negative ones.
I hope these tips help you set financial goals you can actually stick to this new years! I especially like the vision vs. goal advice, and I’ll be keeping that in mind as I make my own resolutions.
What other tips would you add to the list? Share in the comments.