facebook

Why Big New Year’s Money Resolutions Won’t Make You Rich

Read this post in 4 minutes

Congratulations. You’ve made it to the end of the perhaps most dreaded month of the year. Good old Januworry. And for all your spending sins, our guess is that you’ve probably resolved towards improving your financial habits this year. You’re not wrong in making this resolution. However, there’s a great chance that what you are focusing on in reaching your goals is wrong.

For many make the resolution, but few reach the goal

Making better financial decisions ranked third this year in the top 10 resolutions for 2017. And of course, our resolution setting is never complete without the swarm of articles instructing us on how we can double down x-amount of debt by y-amount of time. Or get z-amount richer by the end of this year.

Yet still, the the stats show that only 7 out of 10 probably stuck to their money resolutions after the first week. 5 out of 10 are still at it now, a month later. And we’re expecting only 4 out of 10 to still be on track by June 2017.

Therefore, if the resolve to make better decisions regarding our money exists, and the resources to assist us are vast, where does the problem lie?

The problem could lie with the misconceptions we believe as we create or resolutions. One of the biggest misconceptions about goal setting is how they should be big, bold and shiny for them to be valid and effective.

The stark reality is that more ideas and motivations are frustrated with big dreams than with little achievements.

The handicap of the big picture thinkers

The irony in marveling at financially successful people in order to emulate their success in our own lives is how many of them actually advise us NOT to focus on becoming successful.

“The reason I’ve been able to be so financially successful is my focus has never, ever for one minute been money.”- Oprah Winfrey

“I didn’t start out with dream of being super-rich.”- Bill Gates

This is because successful billionaires such as Oprah and Bill Gates, have a strong realization of how distracting narrowing one’s focus on the big picture rather than the process can be. As blogger, Jake Jenkins,  beautifully states “It is hard to start working on a project if you feel like it needs to change the world.  Where do you start?  What does it look like?  How do you even imagine a project that will have 1 billion users?”

Although most of our financial resolutions probably do not include creating the next Facebook to get out of debt or reach our money goals, the concept still applies. If we’re too focused on the outcome, on the results, we expose ourselves to the risk of growing impatient. And as a result we miss out on the lessons, skills and important details that should be learned along the process. These are important because they not only make us successful in achieving our goals, they keep us consistent in this realm of success.

Rather make process based resolutions

“Insanity: doing the same thing over and over again and expecting different results.- Albert Einstein”

One can take Albert Einstein’s famous quote on insanity further and state that insanity is expecting different results from yourself without changing who you are. You cannot expect to change your money habits if your thoughts, ideas, beliefs and knowledge regarding money haven’t changed. Habits are not merely actions. But are a function of who we are on the inside. This means that rather than resolving to save more, your resolution should be to learn more about your spending habits. The real reason behind why you constantly and continually make a stop past your favorite make-up, gadget or shoe store for a mid-month “pick me up” treat. This is an example of a process based resolution. Resolving to take the small steps that lead you towards the ultimate goal. Resolving to change who you are first so you can become the person who continuously wins financially.

Money resolutions that are process based that you should consider include:

  • Learning and understanding the language of money and investments
  • Downloading apps such as Mint  so you can better understand and monitor your spending habits
  • Reading a book a month on personal finance
  • Learning what a Zero-Based Budget is, and slowly training yourself to create one and stick to it
  • And, joining an online club with people with the same financial goals as you

Just as with someone who plans to lose weight, instead of placing their focus on the 20 lbs they’d like to shed, it would be more effective to focus on the next bite. And then the next bite after that. For it is the accumulation of the right or wrong bites that will ultimately lead to the weight outcomes that person achieves.

The same should apply with your financial resolutions. Keep the focus on how you spend the very next dollar. Will that transaction lead you further or closer to your goals? And if it will lead you further, resolve towards getting to the bottom of why making that transaction is so important in relation to your goals.

With that being said, you may find that your money resolutions have completion dates that are 2 to 3 years from now, with progress reports in between. That’s totally okay. At least you’ll know that this time, when you get to your financial destination, you’ll actually stay there. For good.

 

Comments

comments

Staff Writer
Staff Writer

I’m one of The Money Fam writers. If it’s relevant to you building wealth, I write about it.

Subscribe To Our Weekly Newsletter

Our posts on the gram