With the holiday period behind us and now that we’re into February 2015, now is the perfect time to talk about New Year’s resolutions. If you set them, how are you doing? Still sticking with it or has your enthusiasm dropped off a bit?
The reason we ask is that maybe we are all overlooking something that makes resolutions very difficult to keep; and why setting goals instead of making resolutions might make more sense.
The difference between goals and resolutions
Goals and resolutions are essentially the same thing, but the issue with making resolutions is that they imply that we are somehow doing something wrong or poorly. Many of us are already not lacking for guilt or criticism in our lives, so why heap more on ourselves at the start of each year?
This logic can trip up many investors. Like New Year’s resolutions, we frame our past financial behaviour as doing something wrong. Because it’s a negative, it can be difficult to wrap our heads around making a change. Who likes admitting that they made a mistake?
But something happens when we talk in terms of setting goals. It becomes more about the possibility of something good happening as opposed to the negative of a past mistake. We get that this seems like a very small distinction, but it’s an important one.
The importance of attitude in personal finance planning
When we talk about making better financial decisions, attitude matters. How much criticism do we need before it becomes counter-productive? It’s one thing to acknowledge and learn from a mistake, it’s another thing to make it our focus going forward.
By setting personal finance planning goals that imply something good, we’re changing the tone from one of blame to one of possibility. Did you resolve to stop spending all your money on things you don’t really need? What if instead you set a goal to get serious about implementing a strategy to achieve financial independence? The goal deals with the mistake and gives you a positive way forward while the resolution implies you did something stupid.
So why not latch on to the small thing of setting a goal instead of making a resolution? If you’re struggling with your personal finance planning resolutions, it’s not too late to make the switch.
Set a goal or two for 2015 and see what happens. To help you, Calibre has some great client tools to bring these goals to life, which will in turn help inspire you to action. Please let us know if we can help.