Keeping your financial resolutions
As we find ourselves already nearing the third month of 2025, it’s an interesting time to revisit those early season resolutions, particularly financial resolutions.
Research from Baylor College of Medicine and Fisher College of Business indicates that the failure rate of New Year’s resolutions is about 90%. Of those making resolutions 23% abandon them by the end of the first week in January and by the last week of January that climbs to 43%. Drive Research reports that of the 3 in 10 people making resolutions in 2024, 62% did so because they felt pressured into it. That hardly seems like a sustainable motivator–and clearly given the failure rate–it’s not!
A Motley Fool survey revealed that 60% of Americans make resolutions related to their personal finance, but in keeping with other types of resolutions only 9% who make them, actually keep them throughout the year.
Even if the statistical evidence can be argued, the idea remains…it’s hard to set and achieve those seemingly well-intended New Year’s resolutions. Working with your CERTIFIED FINANCIAL PLANNER™ advisor at Financial Service Group is a great starting point. We are dedicated to helping you achieve your Great Life and financial objectives through financial life planning. While that takes care of big picture, there are daily “maintenance items” that can become great goals as well. And they’re good ideas to pass along to children and grandchildren to help ensure they establish and maintain healthy money habits.
Why do financial resolutions fail?
While there can be many reasons why financial resolutions fail, here are a few to consider as you set to creating your own financial goals, even outside of the traditional New-Years-resolution-kind.
The goal is too vague. Setting a resolution like “save more money” or “reduce credit card spending” are indeed wise ambitions but because they are not specifically measurable, they may be easier to abandon. The more specific the goal, the easier it is to measure positive movement toward it. For example, a resolution to “spend $100 less per week and save $75 and donate $25” provides a specific, measurable target. Regardless of the specificity, it’s important to keep the goal realistic. Setting a goal like saving $500 a week or eliminating all credit card spending would likely not be achievable especially for younger people just starting on their savings journey.
The motivation is unclear. Understanding what is driving the goal is important. Being able to articulate what you want for your financial well-being and why you want that, helps keep you focused on your resolutions, anchors your motivators, and guides you toward greater potential for achieving your objectives. During your meetings at FSG, we spend time learning about your drivers and what is most important to you and your family. Often, it’s through this type of in-depth conversation that your motivators become clear and can be factored into your financial life planning objectives and strategies.
There’s little/no accountability. From losing weight to reducing debt, goals have a better chance of succeeding if there’s ample support from outside. Having a trusted partner to help keep you on your path, makes the road a little easier to navigate. Family members, attorneys, and your financial advisor make great accountability partners in helping you stick to your financial resolutions and longer-term goals. We’ll check-in on your goals during our meetings, we can help you reset if you’re struggling, we can remind you of your motivation, and coach you through relapses.
Setbacks are inevitable. Even with clearly articulated goals, it’s easy to wander off track. During those times it’s important be flexible and compassionate with yourself. Don’t simply abandon a goal because you had a lapse or over-spent on Amazon for example. Rather, learn to recognize the triggers that may lead to that over-spending, reconnect with the values that help drive your motivation, be forgiving, and recommit to your resolution.
And always remember, we’re here to support you in achieving your great life as you define it and want it to be.
