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Sticking to your resolutions

3 min read

Financial Resolutions

Written By

Tinuke Oluyomi Daniel

Rounding it up

  • The first step to achieving your New Year’s resolutions is re-assessing those resolutions. They’re often too broad or overly ambitious to stick.

  • Next, find out your Whats and Whys—what stopped you in the past from reaching your resolutions in the past, and why? Maybe they weren’t specific or measurable enough.

  • Afterwards, make a realistic plan of how you’ll achieve this year’s resolutions. It also helps to break them down into smaller goals.

  • Finally, use a commitment device to help lock you into a course of action.

Q: I’ve made the same resolution three New Year’s in a row. I want to make it happen this year. How can I make it stick?

So I have both good news and bad news for you. Let’s get the bad news out of the way first: Most surveys suggest that fewer than 10% of us will actually achieve our New Year’s resolutions.

Don’t be discouraged. Stick with me, here.

The good news is that you still want to make this resolution happen despite failing in the past. That means your motivation for achievement is high, and that in itself is a very important ingredient for success. Believe me: As a behavioural economist, I do this stuff for a living. Are you ready to join the exclusive group of resolution-makers who make it further than February? Only about 20% of us ever get that far. Here are some tips that will make this year different from the last.

1. Re-assess the resolution

People often struggle with keeping resolutions because they are too broad, overly ambitious or not specific. For instance, you might say, “I want to save more money in 2018.” But if you want to succeed, your resolution needs to be specific and realistic. If it does not meet those criteria then see if you can re-define it or break it down into a smaller more manageable goal. A better resolution might be: “In 2018, I am going to save $500 a month.” Why is that better? You need a resolution that is easy to measure to determine if you are succeeding. Trying to be healthier isn’t measurable; eating one extra serving of vegetables or doing 30 minutes of exercise each day is measurable. That also makes it easier, more manageable and realistic.

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2. Find your whats and whys

What has stopped you in the past and why? Where did you fall off the wagon? You may find that simple things are tripping you up. For example, in the summertime when all the restaurants have their patios open, you may find it more difficult to meet your goal of saving $500 a month. Now think about ways you can remove that barrier to achieving your goal. For example, in behavioural science we talk about prospective memory failures — simply forgetting to do the thing you intended to do once the future rolls around — as one of the reasons you never make it. In this case your fix may be as simple as setting a reminder in your smartphone. Or, if your goal is to cut down on impulse buys when shopping at the mall, your tactic for this year could be to pay in cash and only carry the amount you need to cover the items you want to purchase. It’s old school, but it works.

3. Make a realistic plan

Without a plan for how you will achieve your resolution, keeping it will be quite difficult. But how you plan may be important, too. A recent paper published in Psychological Science shows that when planning your goals, it may work best to work in reverse. In a series of five studies, researchers at the Peking University HSBC Business School, the Korea University Business School and the University of Iowa asked participants to plan for a set of tasks (stuff like exam prep, schoolwork and preparing for important job interviews). Some were asked to plan their steps in chronological order, while others were asked to imagine or define what achievement was for them and then work backwards. This is known as backward planning: Start with the last step you would have to do right before you achieve your goal, and work back until you can identify the steps you need to take right now. In the study, the students who planned in reverse were able to better anticipate the necessary steps and more likely to follow their original plan to reach their goal.

"Start with the last step you would need to do before you achieve your goal, and work back until you can identify the steps you need to take right now."

So start at the end and work backwards: Think through obstacles you might encounter at each step and how you will overcome them. Make sure your plan makes it clear what you will do, when you will do it and how you will do it.

4. Use a commitment device

Let’s face it, self control can only take us so far. We often fail because, well, it’s easier. Commitment devices help lock us into courses of action we might not choose on our own but ultimately help us achieve our goals. They often help us restrict future choices that conflict with achieving your goals and have been shown to increase people’s success in saving more money and making healthier choices. Here’s an example: If your goal is to save $500 a month, set an automatic transfer to your savings account so that regardless of whatever temptations come your way, you are consistently setting aside the money you intend to save. KOHO’s Savings Goals work well for this because your money is automatically stashed away for you in your goal. Another idea is to make your goal public: Tell your friends and family about your plan and let them keep track of how you are following through. You might even establish a pre-set penalty for slippage and recruit a friend or family member to enforce the penalty when needed.

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5. Set smaller goals

Break your resolution down into several smaller goals which you can reward yourself for achieving throughout the year. Research suggests that people are better able to maintain a behaviour when they are repeatedly rewarded for it. That’s because present biases cause us to crave more immediate rewards. But you can take advantage of this to help keep yourself motivated. Set up a few milestones at short intervals — weekly or monthly challenges could work — and a pre-defined reward for achieving them. You could have an end-of-month treat for reaching your savings target or make something you enjoy weekly be contingent on you achieving the tasks you set out to accomplish. Yes, that means you can use Netflix binges and lattes as a reward for working towards your goals.

Try all of these tips — or even just a few of them. As someone who’s tried and failed before, you know better than most that changing habits is hard and that we don’t always succeed on the first attempt. But with a bit of planning and strategic thinking, hopefully this year will be the year that you achieve your goal.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!


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