Jean Chatzky
Do one thing: It is time to flip the script on making resolutions, and instead break down what you want to achieve in the new year into more manageable, bite-sized goals.
Goodbye Resolutions, Hello Goals
We almost always have the best intentions when we turn the page on a shiny new year and begin making plans for the things we hope to accomplish in the days and months ahead. In fact, millions of Americans – roughly one-third of us living in the U.S. – make annual resolutions, according to the Pew Research Center. Of those hopeful people, nearly two-thirds (some 61%) want something financial.
Start Small to Build Momentum
“The problem with most financial resolutions is they are way too big and too vague,” says Certified Financial Planner Alvin Carlos, managing partner at District Capital Management in Washington, DC. “Start small. Be specific.”
Reframe Goals. To be more specific with your goals, he recommends reframing like this:
- Don’t just say ‘I want to save more.’
- Make a plan on how you will sock away more by saying, “I will move $200 to my high-yield savings every time I get paid.”
Make SMART Goals
You probably won’t be surprised to find out that research shows us time and again that most people give up on their resolutions within just a few months, if that long. That’s why it’s so much better (and more productive) to ditch the resolutions we make for ourselves in favor of goals. And those goals are even better when they are SMART, which stands for:
- Specific
- Measurable
- Achievable
- Relevant
- Time Bound
Essentially, this means that when you set a new goal using the SMART formula:
- You need to know exactly what you are aiming for.
- You need to know when you want to achieve the goal.
- Next, get strategic and break it down into smaller chunks that you can more easily manage – instead of aiming for the whole thing at once.
Why? Because if you try to do too much too quickly, the odds are in your favor to fail and not accomplish what you set out for.
Real Life Example of a SMART Goal
If you could really use a vacation – or beef up your emergency fund – by the end of 2026, here’s how to turn it into a SMART goal.
SMART Goal Steps
To get started, here are some real-life steps:
- Take a few minutes and break it down on paper, a computer file, or a spreadsheet.
- To be more specific, measurable, and time-bound, you can commit to saving $5,200 (or any amount you choose) for an emergency fund or vacation by the end of December 2026.
- To make it achievable, it’s helpful to break it down into smaller chunks as mentioned previously.
- To do that, note that you will need to:
- Save $100 a week for the 52 weeks to achieve your goal.
- Break it down even more by day, save about $14.29 a day to reach your year-end goal.
Pro-tip: One of the best ways to save money is to set up a separate account and funnel funds from your main checking account to the other account every time you get paid. Most financial institutions allow you to set up automatic transfers from one account to another to streamline the process.
Accountability
Just like with other goals – to eat at home more often or exercise more regularly, for example – it really helps you achieve your objectives when you let someone else know, so you have a friend or spouse to help keep you on track when things get challenging. Carlos says:
- Share your goal with someone and share your monthly progress.
- Most of us will need an accountability partner.
- If you reach a milestone, you’ll have someone to celebrate it with.
Science of Accountability
Science backs this up. Several controlled psychological studies and other behavioral research across several domains (including goal setting, exercise, and habit change) show that adding social accountability can significantly improve your goal attainment compared to people who privately track their progress without letting anyone else know.
Get It on Paper
And just like you have better recall of things you write down, think about a student taking notes for a test. Research from Dominican University in California shows that:
People who take the time to actually write down a goal have a significantly greater chance of reaching the objective than those who simply think about it.
The Power of Writing it Down
Dominican Psychology Professor Gail Matthews conducted a study with 149 people from the U.S. and abroad of varying ages and careers. The participants pursued a number of goals, including: completing a project, increasing income, increasing productivity, getting organized, reducing work anxiety, and learning a new skill.
After placing participants in different groups where they considered a goal, wrote down a goal, and shared the goal with someone, among other experiences, the results showed the following:
- Those who took pen to paper and then shared their goal with a friend or colleague met their goal within a specific timeframe.
- The research also showed that even the group that wrote down a goal and did not share it with others had better success than those who never wrote the goal down at all.
With reporting by Casandra Andrews
