The countdown to 2016 is nearly here and the New Year brings with it new opportunities and plans for personal improvement. Once we count down the seconds to midnight, it usually isn’t long before we’re counting down the days before our resolutions come to a disappointing stop. If you’ve found in the past that your New Year’s resolutions aren’t adding up to much more than good intentions – you’re not alone, so maybe you’ve just made the wrong type of resolution.
A recent study found that unlike the ever-popular ‘Exercise More and Lose Weight’, individuals setting financially focused resolutions were more likely to experience the success they were looking for. So, why are financial resolutions more likely to stick?
By nature, financial resolutions lend themselves to clear activities and actionable plans. For example, while “eating less” might be hard to determine, “saving more” can be easily quantified and tracked. If you have a goal to save a particular amount of money, the steps to achieving that goal can be clearly laid out in advance. By following a set plan, success can be immediately measured, and gratifying. You don’t have to save all week and hope to see more money in your account like someone hoping to see results on the scale, if you save, the money will be there and you can enjoy your incremental success. In addition, achieving your year’s worth of financial goals can sometimes be completed in just a short time, like setting up your RRSP account, or a recurring transfer.
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The fact that financial resolutions can mean real improvements in a person’s life is good news for the growing list of North Americans planning on making financial resolutions for 2016. More and more people are looking to make their financial circumstances a priority, of the financial resolutions people are planning for the New Year, the most cited were ‘Saving More, Spending Less and Paying Off Debt’.
While making a financial resolution might mean more likelihood of success, it’s important to remember that making a pledge to improve your finances can’t be done unless you also make a plan.