Studies have shown that as much as 88 per cent of people fail to achieve their New Year’s resolutions, with 25 per cent giving up in the first week. Why is this the case, and how can you beat the odds to actually succeed?
The problem starts with the New Year’s resolution itself. Individuals often set vague and largely unattainable goals such as “I want to become a millionaire this year,” with no plan of action to achieve them. Setting a New Year’s resolution isn’t just about writing down a hopeful outcome, it’s about planning exactly what steps need to be taken to succeed and incorporating this into your daily/weekly schedule.
The ‘SMART’ framework describes the five key characteristics of an ideal resolution:
Specific – Clear, concise goals targeting a specific area for improvement.
Measurable – It is possible to track your progress.
Actionable – It is clear what steps need to be taken to achieve this goal.
Realistic – The resolution is challenging but achievable.
Time-bound – The goal is to be achieved within a certain amount of time.
By following this framework when setting your New Year’s resolutions, it will be much clearer to see what needs to be done and when, and you will be much more likely to achieve your goals.
An example of a New Year’s resolution that does not follow the SMART framework is “I want to save more money this year.” As you can see, this resolution is very vague and does not prompt any specific action. There is no measurable target against which you can compare your progress.
Here is how you could set the same goal according to the SMART framework:
Specific – I would like to save and invest £1,200 into a Stocks and Shares ISA this year.
Measurable – I can look at my account to see how much I have saved.
Actionable – To save £1,200 I will need to save £100 each month, which is approximately £25 each week. I will look to reduce costs on everyday expenditure to make such weekly savings, as well as earn some extra money on the side.
Realistic – Based on my current financial situation, by making a few improvements to my spending habits and earning some extra money on the side, I should be able to achieve this goal.
Time-bound – If I meet my weekly and monthly targets, I will achieve my goal within 1 year.
As you can see, just by adding a bit more detail to the resolution through the use of the SMART framework, I now have a measurable target against which I can track my progress, as well as a clear idea as to what steps I need to take each week/month to achieve the goal by the end of the year.
One of the most important aspects is to make sure the resolution is realistic. If you set goals that are almost impossible to achieve based on your situation, then you will lose motivation as soon as you see you are consistently failing to meet your targets. It is much better to set a lower target and over-deliver than to have to reduce it because you are underperforming. Remember, you are trying to be part of the 12 per cent that succeed, not the 88 per cent that fail!
If you are consistently beating your targets, there is nothing to stop you from increasing them slightly. Using the example from above, if I found I could save £50 per week, I could adjust my resolution such that I save £2,400 by the end of the year.
Set some time at the end of each week or month to review your progress, and look for any adjustments you could make. Use this time to try and make improvements to your strategy, perhaps changing some of the actions you take on a daily basis. This will only increase your chances of success, and it should be relatively easy if you followed the SMART framework and made sure your progress was measurable.
Another tip is to make yourself accountable to someone who you trust. Tell this person about your goals, and get them to make sure you are taking appropriate action. Give them a way of punishing you if they find you are not sticking to your resolutions, as this will create a greater incentive for you to follow through.
Finally, don’t just write down your New Year’s resolutions and then forget about them. Stick them up on the wall, or on your kitchen door, so that you are reminded of your goals every day. This will give you a clear purpose, and you will always know what you are trying to achieve, and how you are going to go about doing it. So hopefully you should now be able to set your New Year’s resolutions such that you can be part of the 12 per cent that succeed. For some different financial New Year’s resolutions you could make, check out this article here. Good luck with your goals and remember, stay SMART!