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Don’t want your financial resolutions to fail this year? Try this technique instead to end 2024 with more money than you started with.
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According to The Motley Fool Ascent’s Financial New Year’s Resolution survey, 67% of Americans planned to make a New Year’s resolution related to money. Unfortunately, while many people want to improve their personal finances, few will successfully do so.
Researchers found that fewer than 10% of people who make New Year’s resolutions end up accomplishing them. And only around one-quarter of people make it even 30 days before abandoning their plans.
Rather than setting money goals you aren’t going to stick to, why not take a different approach to ending 2024 richer? Do this instead — especially if you’re already starting to wonder if you can stick to your resolutions all year long.
Set SMART goals
Resolutions often fail because they aren’t specific enough or realistic enough. To avoid having this happen to you, set SMART goals instead. SMART goals are:
Specific: For example, you don’t want to just “pay off your credit cards.” Instead, you’d specify that you want to “pay off $1,500 of credit card debt by Dec. 31, 2024.”Measurable: You should have a clear way to determine if you are being successful. Instead of saying you want to “save more,” you could specify you want to “save $150 a month more” as you can measure that easily.Actionable: Your goals should be something you can act on. Saying you want to “do better with money,” isn’t something you can take action to do. But saying you want to make a detailed budget and track your spending to make sure you stick to it gives you a concrete action plan.Relevant: Ensure the goals you’re setting for yourself are things you actually want to accomplish so you’re motivated enough to stick to them.Time-bound: Finally, you should have a time frame for when you want to accomplish the goals you have set for yourself — which should be by the end of the year. Even if you have a longer-term goal, like saving for retirement, break that down into determining how much you want to save for it in 2024.
When you set your SMART goals, pick just a few things to focus on. For example, you may want one short-term, one medium-term, and one long-term goal. If you try to do too much, you’re less likely to succeed at any of it.
Automate the process
If you really want to make sure you end 2024 richer, you can go an additional step beyond just setting SMART goals. You can make achieving your goals automatic. Here’s how.
Let’s say you wanted to save $8,000 for retirement by the end of 2024. You could set up automatic transfers of $666.67 per month into your 401(k) or IRA. You can sign up with HR to have money deposited into your 401(k) if you have a plan at work. Or sign up with your brokerage firm or bank account to have the money transferred into an IRA on payday.
By automating the process, you ensure you achieve your goal unless you take steps not to. Most people stick with the status quo and let their automatic transfers go when they should — especially if it’s a goal they care about achieving.
So, as January gets further underway, don’t give up on your resolutions. Instead, set your SMART goals and automate the process of achieving them so you can make this your most successful financial year ever.
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