Turning New Year’s Resolutions Into Lasting Habits

3/3/2021 7 minute read

Things to consider before calling it quits with your financial goals for the new year.

Turning New Year’s resolutions into lasting habits

The pandemic has taken its toll on personal finances for many of us. Thankfully, it’s a new year. And with 2020 in the rear view, most of us turned our attention to the resolutions and goals we have for the new year. When making 2021 New Year’s resolutions, you might’ve chosen several aimed at improving your financial health.

We acknowledge the difficulty of keeping New Year’s resolutions even when the world isn’t in a pandemic. These are stressful times and finding ways to meet your financial goals is something many of us are struggling with right now. We’d like to help you gain your bearings with ways to avoid New Year’s resolution overload and provide tools to help you create healthy habits that last.

The power of habit
So why, if we are so determined to make change, do we sometimes fall short of our goals? It is a sad truth so many New Year’s resolutions are stalled, or dropped altogether — definitely not due to a lack of good intentions. One reason New Year's resolutions can be so difficult to stick with is we are battling against our own deep-rooted habits. Habits form when our behaviors become automatic and are performed with minimum conscious awareness.

Going slow to go fast
When it comes to creating habits we hear sayings like “old habits die hard” and “going slow to go fast” because it has to do with being mindful of the temptation to try and change too much all at once. It’s important to be kind and patient with yourself as lasting change rarely happens overnight.
We all have our own unique situation that calls us to take a look at our financial goals. Maybe we want to build savings, work on spending less than we make or improve our credit – there are a number of financial goals we could look at to build slack.  Whatever the case may be, its understandable breaking old habits and starting new ones to achieve these goals doesn’t happen as quickly as we might like.
Taking on too many goals at once often leads to overload and can cause you to give up. Consider working on one goal at a time. Once you've created some new habits that are automatic they don't require as much attention. Then you can begin work on the next goal. Lasting change won’t happen immediately, but with mindfulness, determination, consistency and patience, we can achieve any goal we desire. Remember, think small for big change.

Tools to create lasting habits
While New Year’s resolutions are made at the beginning of the year - they are intended to be a work in progress. There’s nothing wrong with fine-tuning your goals, or doing a complete reset during the first few months of the year. Whether you want to fine-tune your financial goals or create new ones, you may consider the WOOP framework below, which stands for Wish, Outcome, Obstacles and Plan.
According to psychologist Gabriele Oettingen, a professor of psychology at New York University, we are more likely to reach our goals if we take a realistic approach by thinking about what might stop us along the way. Here is an example of how you could apply the WOOP strategy towards a financial goal:

  1. Wish
    Our wish is to achieve a goal of saving $1,000.

  2. Outcome
    Imagine a positive outcome that could emerge from achieving this goal. If I have an emergency, like a tire blowing out on my car or my washing machine breaking down, I will have the money to cover that expense.

  3. Obstacles
    Identify any obstacles that might get in the way of setting aside money to work towards the goal of saving $1,000. I might have unexpected expenses come up that keep me from setting aside the amount I have designated to save each paycheck.

  4. Plan
    Create a plan to navigate around any obstacles. I should put together a detailed spending plan to help me identify all possible expenses, so I can be intentional about setting aside money towards my goal to save $1,000 by paying myself first.
The WOOP tool can be a great way for you to increase motivation, create habits, reach goals and achieve long-term change.

Accountability partners
Whatever habits you wish to work towards, or financial goals you choose, consider sharing them with someone you trust, such as your friends and family. Having an accountability partner is one of the best ways to stay on the path.
Credit Human is also here to be your accountability partner. For partnership in your financial journey and help in setting goals, contact one of our Financial Health Centers to speak to someone and get on the path to creating and maintaining the financial slack you need right now.
If you would like some additional resources, please consider visiting our partners at GreenPath Financial Wellness.

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