Resolutions are Like Budgets, You Won’t Succeed Unless You Set Goals

This post is a part of Betterment’s Blogging for a Better New Year series.

I love setting goals. I have an extreme type a personality so setting a list of goals and having a plan makes me really happy. As weird as that sounds, it’s true!  As we roll into a new year (where did 2012 go?) the talk is always around resolutions. I hate the word resolutions. Resolutions are meant to be broken and most of us don’t carry our resolutions into February of the year we set them.

I’ve written a personal finance blog for 5 years, I have a weekly podcast and counseled numerous consumers on personal finance. One thing I’ve found is when I used the word “budget”; anyone within earshot would shut down. Instantly. The word is too restrictive and most people think it means they will have to cut out all of the things in life they love to do.

The same goes for the word resolution. Resolutions put a lot of pressure on us to lose 20 pounds, pay of all of our outrageous amounts of debt or whatever other unreasonable terms we pressure ourselves into for the year. PolicyMic had a list of the top 10 resolutions for 2013 and it’s no surprise money was on that list. People I talk to always want to change their financial situation, but so few of us actually do it. We live the same year over and over again vowing each year it’s going to be different. In reality, we don’t take the right steps to make those changes.

Wouldn’t it be nice to do something different this year to make sure you get what you want out of 2013, especially with our financial situation? Here are 5 ways to use your dreams and goals to motivate you into change in 2013:

1. Dream Big in 2013 – What do you want out of 2013? I mean what do you REALLY want? Most of us are too afraid to dream big. We are confined by what we determine as comfortable and easy. This is just not acceptable! To get what you want you have to think outside of your comfort zone and dream big. Your dreams become the goals you work towards, if you let them.

2.  Setting Goals Make Dreams Come True - Once you’ve identified your dreams, it’s time to start setting goals to reach those dreams. Setting goals can be scary but they can also be super motivating, especially when it comes to our finances. Goals give us something long term to work for and when we are constantly reminded of our goals (putting pictures or post its where we will see it regularly are an easy reminder) it can keep us motivated when the daily grind seems a little pointless (and at times it will).

3. Set Specific Goals- Setting a goal of “paying off debt” is not specific. Setting a goal of “paying my credit card off with a $10,000 balance and not using the card again” is specific. You may think your goal is impossible and there is no way you can achieve it. How do you know if you don’t at least try? Seeing a little progress can be the motivating factor that lights you on fire and gives you the energy you need to stay on track to reach your goals.

4. Break Your Goals Down – Sticking with our goal of paying off a $10,000 credit card, we need to think about actionable ways this goal can be broken down. Since it’s unlikely you have $10,000 sitting around to pay on the credit card, it’s easier to look at this number on a monthly basis.  Using Bankrate.com’s Credit Card Payoff Calculator to pay off a credit card with $10,000 at 18% interest in 12 months would mean a payment of $916.80 a month. Yikes! This is a lot of money to put towards your credit card debt every month but don’t get discouraged! Here are some ideas that can help you get there:

• Adjust your monthly spending plan by cutting back in areas you are leaking money and put that extra money (no matter how little) towards your credit card payment.
• Get a second job to earn extra income for the year and put every cent towards that debt
• Sell something or some things and use all of that money towards your credit card debt.
• Turn a hobby into a second income to put towards your debt

Your year is not going to go perfect. Unexpected things will come up that throw you off track and that’s ok. The difference is those who reach their goals are the ones that don’t give up! You may not reach your goal in 12 months but even if it takes you 14 months, who cares? You still reach your goal and your debt is gone!

5. Use Your Goals to Motivate You- If you find you are not making progress towards your goal, it’s time to put on the breaks! Goals should motivate us to keep doing what we are doing and when you are no longer motivated, it’s time to change your goal. It’s important to review your goals regularly to make sure you are still on track and your goals are working for you.

The way to finding success in 2013 is to stop thinking you are limited and get out of your comfort zone. Big dreams mean big things can come into your life, but only if you are open to it! So don’t hold back, what are you waiting for?

You can check out the other posts in this series by searching for the #better2013 hashtag.

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