Every year, about 50% of the new year’s resolutions that people make in the U.S. are related to money.

Whether we’re trying to save more, spend less, pay down debt, or simply get a better grasp on where our finances are, our relationship with money is one that we are often thinking about improving. But studies show that by the end of the year, only about 8% of all resolutions have been kept, and that most of us have given up long before that. So, what can we do to make our money resolutions stick?

A road through the mountains

Know your WHY

One of my favorite things to ask clients when they talk to me about WHAT they’d like to accomplish with money is “Why?” If you think you should be saving more, why do you think that? Is it related to a personal value, goal, or plan, like retiring at 50 or paying off your credit card debt, or is it something you feel you should be doing because of the general societal pressure we put on ourselves to always question whether we’re doing enough or the right thing with money?

Making financial change can be hard—it often involves delaying gratification, living with less, and having to bring your full brain and energy to thinking about your day-to-day financial decisions. If the only thing underlying your desire to improve your money game is simply a general sense that it could or should be better, sticking to your goals when times get tough will be nearly impossible.

So, before you sit down to write a new savings goal or debt payoff goal, figure out why it matters to you.

What is this change going to provide for you and your life that you don’t have now, and why is that important?

Take Stock of Where You Are

Trying to take on a new budgeting or savings goal without any current sense of where or how your money is being spent is typically a recipe for disaster. After all, without a clear sense of how much you spend or what you spend on, it will be nearly impossible to figure out ways to spend less.

Consider setting a new year’s resolution to carefully track your income and expenses all year, and to take a clear inventory of your net worth. Without this foundational piece in place, your plan for how to spend less or save more will likely run into all sorts of problems when it runs into the reality of your actual spending habits.

A commitment in the new year to simply getting a handle on and awareness of your income, expenses, and overall net worth may be the first step to setting a clear and manageable savings, debt payment, or retirement planning goal a year from now. But if you keep skipping this step, it’s likely that you’ll keep running into the same problems with follow through.

Have a Clear Sense of WHAT and a clear plan for HOW

Everyone likes the idea of saving more or paying down debt, but the idea itself is rarely enough to get us there. You need a plan tied to a clear objective. Finding an objective that’s just challenging enough to help you improve your behavior, but not so challenging that you’ll give up immediately, is the key to your success. This is why it’s so important to take stock of where you are. If you are overspending your income by several hundred dollars every month, setting a goal to save $500 is likely to leave you ready to give up by January 5th.

Find a manageable target, then go through your current spending and figure out how to hit that target. If you’re going to set up automated savings of $100 a month, you need to have a clear idea of how you’re planning to spend $100 less each month so that you don’t actually end up $100 short at the end of the month. Are you eating out fewer times? Cancelling or changing subscriptions? What change will you be making so that the extra $100 is there for saving.

If you’re planning to pay off debt, how much are you increasing your payments each month? Which debt are you paying down first? And how are you reducing your spending elsewhere to make sure you have that extra money to put towards your debt? Be as specific and realistic as you can.

It’s this step in the plan that will let you know if your goal is manageable and realistic. If you don’t have a clear plan for how it can happen, scale back, find something that is manageable, that you can build on over time. Small change, successfully carried out and scaled up over time, is going to be far more impactful than grandiose ideas of change, quickly abandoned.

For a lot of extremely good ideas on how to make these types of small but meaningful changes in spending habits, I highly recommend James Clear’s book, Atomic Habits.


Photo: Goodreads

Have a Clear Plan for Dealing with Pain Points

Anticipating the pain points in any plan is extremely important. Pretending that they won’t be there is no way of dealing with them. If money goals didn’t have pain points, we’d all be steadily improving our money game year after year without issue.

Where is it that you will get tempted to overspend? If it’s eating out for convenience because you are just too tired to cook – you need a plan for fast, inexpensive, and easy to prepare food at home or on the go. If it’s overspending on a trip to Target or Costco, what’s your plan for dealing with that? This goes back to taking stock of where you’re at. If you have a clear sense of when, where, and how you spend money, you will be better able to predict those pain points, and plan for them ahead of time, rather than dealing with them in the moment.

Set Up Periodic Check Ins

No improvement happens on a steady climb uphill without bumps along the road. It’s up to you whether a bump in the road is the end of the journey, or simply something to navigate around. If you’re stick-to-itiveness around money goals tends to wane after a week or a month, set up routine check ins for yourself along those timelines. For couples, this might mean scheduling a weekly or monthly money date. If you have a financial planner, maybe this is just a monthly email check in with them. If not, a friend or mentor can often serve as an accountability partner to keep you on track. The important thing is not to beat yourself up over a slip up, it’s to figure out how to course correct before it gets too out of hand.

One of our greatest fall backs in resolution setting is that we set resolutions with a sort of planning euphoria – one that ultimately leads us to ignore the fact that of course this isn’t easy. Instead, we love to make the plan imagining ourselves showing up to it energized and excited every day. But if we go into our plans fully acknowledging that that won’t be the case, we can both plan for how we stick to it even when we don’t feel interested in or excited about it, and plan for routine ways to check in and get ourselves back on track when we start to slip up. The next step up in your money game isn’t perfect money management, it’s getting a little bit better, every day, every month, every year. And having routine ways to reconnect with that is extremely important to sticking to that path of gradual improvement.