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What’s In a New Years Resolution?

2014 promises to be a year of possibilities—a year of change, progress, and success! Or not. It may be another bust. For most, it will surely be another bust. A year is what you make of it. That’s why many Americans—45% to be exact—wisely resolve to make their new year better than the year before. Unfortunately, only 8% of the 45% who make New Years resolutions actually succeed, with 25% quitting within the first week! That’s why we’re focused this week on New Years Resolutions: what they are, why they fail, and how to approach them to ensure success.

Each year, various publications and groups conduct surveys on New Years resolutions. And each year, financial resolutions make up a greater and greater portion. This year, 33% of individuals’ resolutions were finance-related, compared to 36% for weight and 31% for relationships. The top ten resolutions for this year are:

Eat healthier
Drink less
Learn something new
Quit smoking
Create a better balance between work and life
Volunteer more
Save and be more responsible with money
Get more organized
Read more
Finish an unfinished project

And of course I stumbled on some amusing resolutions when researching this show, such as:

To stop procrastinating about procrastinating
To actually laugh out loud when typing “LOL” into a text
To never again take a sleeping pill and laxative at the same time

Even these ridiculous resolutions show a desire to exercise discipline and seek wisdom—although I’m not sure how much wisdom is actually needed to achieve that last one. The point is, silly and trivial resolutions are often the best places to start. Too often, people make unrealistic resolutions, or too many resolutions, and give up entirely when progress proves elusive. It’s better to settle on a handful of small resolutions, achieve them, and then gradually pursue more daunting goals. Instead of resolving to eliminate all your debt, decide instead of eliminate one or two credit card balances.

I was disappointed to see financial responsibility so high on the list of resolutions at number 7. Maybe too few people realize that money problems often contribute to eating worse, drinking more, smoking, and having an unhealthy balance between work and life? And if they’d address number 7 then numbers 1, 2, 4, and 5 would be easier to achieve, if not take care of themselves entirely? Regardless, that is the area I am most familiar with, so I can attest to its importance in most people’s lives. Virtually everyone I meet through this show or through my mortgage company have goals or aspirations that are directly related to getting their finances in order—whether they realize it or not. You would not believe how powerfully financial strain contributes to domestic tension and personal unhappiness.

As you’ve no doubt heard, the first step to recovery is admitting you have a problem. And the best way to admit you have a problem is to have a third party confront you with your spending habits, have you explain yourself, and then scold you like a Catholic nun. The single most important factor in succeeding at your goals and resolutions is to have someone in your life hold you accountable. At Garvens Mortgage Group, we do this all the time. If you want an objective analysis of your spending habits and a sensible plan for rehabilitating your finances, we’re more than happy to assist at no cost. Most commonly, the habits putting a household over the edge are things they have complete control over: the amount of money spent eating out; the super-high car loans; the recurring charges for unused gym memberships or Hulu Plus accounts.

I recently read an article comparing the habits of financially responsible and irresponsible people. The defining difference between these two groups is simply discipline. For example, financially irresponsible people will

Shop with credit cards without a budget or collecting receipts
Invest with 5-10% returns when they have credit card balances at 30% APR
Buy things that end up going unused
Immediately spend all money received through a raise or promotion
Vacation out of town instead of, for example, going camping.

Financially responsible people, meanwhile, will

Make automatic savings into a savings or retirement account
Control their impulse spending
Evaluate their expenses
Eliminate and avoid all debt
Use an envelope budgeting system
Read about personal finances

Clearly, responsible people adopt a far different set of habits than irresponsible people. And that, I think, is the most valuable thing to know about New Years resolutions. People often resolve to achieve a goal like being healthy or being financially secure. But these goals are not events; they are processes. You cannot reach these goals without changing your habits to both achieve these goals and sustain them.

12-28-13 What’s In a New Years Resolution?

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About Jay Garvens

Standing at the intersection of our local real estate market and the nationwide financial industry, Jay Garvens gives you the complete picture of every story affecting today's mortgage market! From personal finances to the political decisions moving markets, tune in for a weekend dose of straight talk from Colorado's most candid mortgage industry commentator! Honest, unbiased, and always unpredictable, Jay explores every facet of today's mortgage industry with an approach that's refreshingly blunt and enormously entertaining!

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