Building a nest egg. Paying off your student loans. Saving up for a dream trip. Coming up with money goals is a piece of cake, seeing as many of us seem to have similar ones: According to the 2016 LearnVest/Barclaycard Financial Literacy Research survey, the top three financial goals cited by respondents include retiring comfortably, getting rid of debt and boosting savings.
But feeling like you’ll actually achieve those goals? That's the hard part.
Part of the problem is we’re not built to make drastic or painful changes. “Human beings are cognitively lazy and change is difficult for us,” explains Brad Klontz, CFP®, cofounder of the Financial Psychology Institute and associate professor of financial psychology at Creighton University. “We all have a tendency to save energy and just go with the status quo.”
Fortunately, it’s easy to reframe your financial resolutions to improve the chances you'll stay on track—even when you have a long road ahead. Here are five tips that can help:
Give Your Goals a Second Look
The best goals aren’t lofty. They’re realistic. If you can't afford your dream home right now, promising yourself you’ll buy it within a year is setting yourself up for disappointment, says Megan Ford, president of the Financial Therapy Association and a practicing financial therapist at the University of Georgia.
A more realistic strategy: Break your goal into bite-size action steps, Ford advises. Each of these mini goals “should fall within your means and be something that you feel motivated by,” she adds. So rather than say you'll buy that dream home next year, perhaps what you aim for instead is to set aside $5,000 into a savings account earmarked for a down payment on a house.
Know Your M.O.
What was the last thing you scrimped and saved for? What’s the last thing you blew your savings on? Taking stock of your financial past—both the wins and the things that made you say, “ouch!”—can help make your current goals more attainable, says Ford. “Looking back with curiosity, not shame or blame, helps you look forward, armed with more knowledge of how you operate and what helps or detracts you from achieving your goals,” she says.
For example, if your goal is to pay off credit card debt and you've come to realize that you always hit the mall after a stressful workday, knowing that about yourself can help you find an alternative (and free!) way to unwind.
If analyzing yourself feels so uncomfortable that you keep putting it off, it’s possible that your emotions, not necessarily your cash flow, are what's holding you back from reaching your goals. In these instances, speaking to a financial therapist may help you better understand your feelings about money and set spending and saving habits that work for—not against—you, says Ford.
Keep Your Goal in Sight — Literally
“Most of our decisions are made with our emotional brain, which responds much better to images than words,” notes Klontz. That’s why he recommends making a vision board illustrating the goal you have in mind, whether it’s a photo of your dream home or the business you want to own someday. “Keep this visual in a place where you’ll see it daily,” Klontz advises. "You could also recite your goals daily to keep them top of mind."
Make the Journey More Appealing
It can take a long while to reach a goal, so build small treats into your money resolution that reward you for hitting milestones along the way. For instance, each time you hit a set target, like paying off the credit card with the highest interest rate, celebrate a little. “This isn’t to say that you should reverse your progress by overindulging,” cautions Ford, “but go to a movie you’ve been wanting to see or get a massage. Think about what’s most important to you so that the reward is meaningful.”
Fulfilling a money resolution is likely going to entail adopting some different behaviors that can be tough to swallow, like eating out less, working some overtime or giving up your beloved daily lattes. “Change isn't easy,” says Ford. “We tend to get stuck in patterns.” So just admit to yourself now: Yes, there will be setbacks and bumps along the way. “[But] having realistic expectations for the process will help you bounce back and regain your focus,” Ford says.
And if your original approach doesn’t seem to be getting you any closer to your goal, try a different strategy, whether it's breaking down your goal even further or revising your original number. Most important, “be patient and compassionate with yourself," says Ford. “The bottom line is, if the original plan isn't working, simply revise the plan. Don't give up on it altogether.”