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Oops, I Broke My Resolutions Already!

Show of hands: How many of you achieved your New Year's resolutions for 2007? Or better yet, who even remembers them at all?

If you can actually locate the crumpled cocktail napkin with last year's resolutions, statistically speaking, you've probably made some headway. Studies show that those who set goals and -- this is the important part, people -- commit them to paper are more successful in achieving them.

Before you grab some scrap paper and a pen, put some thought into composing some money resolutions for 2008 that you'll actually be motivated to carry out. To frame your thinking, here are two schools of thought. You can ...

1. Compose resolutions based on the teachings of goals gurus.

Or ...

2. Scrap the acronyms and take a goal-setting shortcut.

Guess which one I prefer. (Hint: Check out my lazy girl's guide to budgeting.)

Goals gurus have a host of mnemonics to help guide your thinking: Are your goals S.M.A.R.T. (you know -- specific, measurable, attainable, realistic, and tangible) or the S.M.A.R.T.E.S.T. (add "engaging," "shifting goals," and "team effort")? Did you "find your 'why'"? Are you "happy to achieve rather than achieving to be happy"?

If goal-speak works for you, fantastic. It does for lots of folks, and I salute each and every one of you. But if, like me, you're more inclined to get where you want by following the path of least resistance, then try this two-bucket approach to money resolutions.

The two-checklist resolution solution
In my goals for those with slacker tendencies (guilty!), I've found it best to divide resolutions into two types. The first category includes tasks with a finite end date: "finish taxes in February," "roll over old 401(k) into an IRA," or "pay off car loan six months early." The tasks may be tedious, but once they're done, they're done!

The second category is composed of ongoing behaviors -- or worrisome financial habits -- that you want to change. Things like "stop buying stupid stuff" or "invest more money this year" are routines you want to introduce to your financial repertoire.

How to make those resolutions stick
Thanks to technology, you can easily overcome troubling financial behavior. If "pay bills on time" is an issue, automating your bill payments through your bank will make sticking to that resolution a snap.

Other financial habits -- such as "track spending more closely" -- are a bit trickier. New patterns don't form overnight, you know. You need to devote a daily, conscious effort to these habits until they become routine.

If you repeat the process long enough, good habits will become second nature. How so? Thankfully, plenty of folks have suffered for scientific research so that you and I can simply cheat off their homework.

Repetition, public embarrassment, and the three Rs
To make financial behaviors routine, try a few of these tricks:

  • The power of 10: Procrastinators and commitment-phobes, take heed: Anyone can stomach just about anything for 10 minutes. Set a timer, and give your particular task a shot. If after 10 minutes you need a break, no problem. But don't be surprised to find yourself resetting the buzzer and sticking it out until you're all done. (If you're distracted by the ticking, get a sand timer. I find it a tad more relaxing to watch the grains pile up, as opposed to feeling like I have a bomb to defuse before the credits roll.)
  • The power of 17: Repetition isn't just good for improving your golf swing or perfecting the robot dance for your next office party. Studies show that if you do something 17 times without a lapse back to your old ways (e.g., always choosing salad over fries or cash over credit), the act will become second nature.
  • The power of publicity: Accountability is a powerful motivator, so don't keep your objectives a secret. Websites such as MyGoals.com, MyGoalManager.com, and BackPackIt.com allow you to share your goals with others online. Or simply hang your resolutions on the fridge for the whole family (and housekeeper and dog walker) to see.
  • The power of planning: As a friend of mine is fond of saying, "Don't wait until the morning to start reforming." Preparation is key, and it helps you stick to your resolve when game time rolls around. You can also plan ahead for problem areas -- like leaving the credit cards at home when hitting the mall with a pal, or formalizing a vacation budget for meals, gifts, and entertainment before getting on the plane.
  • The power of alliteration -- the three Rs: OK, there is one goal-speak mnemonic I like. It's the three Rs -- review, re-evaluate, rewrite. Life is fluid, and goals should be, too. As you make progress on your tasks, you'll need to compose new to-do steps on your action plan. And I'll add a fourth R: reward. Formalize (a.k.a. write down) specific rewards for reaching major and minor milestones.

Good financial habits have tangible benefits over time. Think about what it'll be like to start January 2009 with no credit card debt, a fatter retirement savings account, no looming car loan, and an actual savings plan for big-ticket items. And, for bragging purposes, no one will ever know if they weren't on your original list of resolutions anyway.

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