As the revelry from New Year's fades, so too does the resolve of many people who made financial resolutions. What once seemed like a chance for a new start turns into small failures, then bigger failures, and then it gets dropped entirely.
It's human nature. And it seems that some resolutions are harder to keep than others. The majority of Americans (65%) entered 2019 with a financial resolution, and 63% of those cited "building a habit of savings" as their goal, according to a survey by CIT Group's CIT Bank.
Then comes the hard part
It's encouraging that so many Americans want to take steps to improve their finances. What's less inspiring is that many of people find keeping a financial resolution difficult. In fact, 57% of U.S. consumers say cutting down on eating out (or ordering in) is easier than keeping a financial resolution for a year.
That may be understandable -- it's relatively easy to eat out or order in less often. It's much harder, however, to lose 15 pounds -- yet 27% said that's easier to do than keeping a financial resolution.
"For many, a New Year's resolution becomes an afterthought a few weeks into January," said CIT Bank's head of internet banking, Ravi Kumar, in an email to The Motley Fool. "It doesn't have to be that way. Building a steady habit of savings is an effective way to keep your financial resolutions on track."
Kumar suggests that consumers who believe keeping a financial resolution is harder than eating out less can attack the problem with a plan to approach your savings goals tactically.
"Two out of three consumers report that building a habit of savings was their top strategy to maintain their financial resolution this year," he said. "Instead of spending more, make it easier on yourself to save by establishing a plan to keep your goals on track."
One day at a time
Achieving financial resolutions require having a plan. It's one thing to say "I'm going to save more money," and something else entirely to say "I want to have $1,000 in extra savings by June." The first is an amorphous goal, making a definitive success or failure hard to measure. The second offers a hard target -- you could fall off the path and still succeed in the end.
If you set a goal, work toward it every day. Use it as a guidepost to consider your decisions, and make little changes that complement it. Something like packing lunch in the morning or skipping an after-work cocktail can make a meaningful difference if you do it often enough.
The biggest challenge, however, is how to overcome making a mistake without letting it derail your progress. Perhaps one drink turned into two, which turned into a pricey dinner and then an Uber home. When you spend more than you hoped, assess the damage and adjust accordingly.
Let's say you spent $100 more than you intended. Instead of throwing in the towel and going back to your frivolous ways, tighten your budget for a bit. Go into a period of forced austerity to get back on track. When that ends, you'll have the added benefit of seeing that sacrificing in your spending wasn't as bad as you imagined.
Changing your habits isn't easy. Breaking things down into small manageable goals makes it easier, and gives you a better chance of recovering from a slipup.