4 New Year’s Financial Resolutions You Can Ignore

Many to give up on their hopes quickly.

Jan 26, 2014 at 11:00AM

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, we 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.

One stock you shouldn't ignore
There’s a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

This article originally appeared on MyBankTracker.com

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers