March is here – the month of the Irish, NCAA basketball, and diminished New Year’s resolutions. All the gung-ho dieters are now quietly giving up their weight-loss goals, the gym that was teeming with new members in January is now emptying out save for the year-round regulars, and those committed to finally getting a grip on their money are seeing that grip unravel. What is this phenomenon about? Why do we lose the motivation to stick to our New Year’s resolutions so soon after starting them? Well, according to psychotherapist Robi Ludwig, the reason for this is that we count on motivation to keep up with our goals – but self-motivation is not enough. Here’s the problem – there’s no plan in motivation. Sure, you can plan to be motivated, but how do you measure and maintain that? Your resolution needs structure and definition: determine what to change, how to change it, how to measure it, and what your timeline and final outcome will be.
Without that structure, your resolution may play out like this. You tell yourself, “I’m going to save more money,” and after a couple of months, you realize that nothing has changed. But it sounded like such a responsible idea: New Year, New You, New Finances.
Without that defined plan, though, your resolution could never be more than just wishful thinking. So how do you plan for a financial resolution, then, and how do you stick with it? With that tried and true solution: a budget, of course.
What to Change
The first thing you need to do is decide what needs to be changed. Where did you fall short last year or even last month? Take that information and start to create a list of what you want to do different this year, but be careful. You don’t want to change everything, especially if “everything” ends up being more than two or three goals. Stick to a few goals so you don’t overwhelm yourself, and you’ll start on the right foot.
How to Change
Now you need to make your plan detailed. Your goal should be specific enough that if you showed it to someone on the street, they would interpret it the same way that you do. Remember, the devil is in the details, which is why many resolutions fall through without further definition. For example, the odds of meeting your goal are pretty slim if you simply state, “I am going to save more money.” Your odds of success improve, however, when you give it parameters: “I am going to save $100 more this month.” You need a real goal to strive for, because “saving more money” could imply $25 to one person, and $2500 to another.
One way to actually start saving is by setting up automated savings. If you’re already enrolled in direct deposit, you may be able to designate that a percentage of your paycheck goes directly to you savings account. You may also be able to set up automated transfers from your checking to savings account through your bank. Either way, the money is going to savings before you even touch it.
How to Measure Your Change
Each time you make a contribution to your savings goal, celebrate it. You don’t have to wait until the entire goal is reached to be proud of your progress. This takes care of some of that instant gratification that many of us thrive on, and it keeps us excited to reach the end goal.
Monitor your progress weekly and expect to have some missteps. Your resolution will only stick if you keep it on track, but nobody is perfect. Set aside time in your normal schedule to sit down and go through your finances to adjust what you’re spending or to celebrate all that you’re saving. Pretty soon it will be a normal task, and this will make a big difference in the end.
Success. If you create a detailed plan and stick to it, you won’t fail. Whether your goal is to save over a month, year, or decade, you will see results if you stick to your plan.
Then, share your results! It’s not a bad idea to share your goal from the beginning to give yourself some accountability, but sharing your results will push you to keep going after you hit your first mark.
All-in-all, you need structure and a way to make that motivation last longer than a couple of weeks. To lose weight, it’s your weight-loss program; to save more money, it’s your budget. Whatever your resolution is, a detailed plan and some accountability will be a rewarding journey.