Why Your Financial Resolutions Are Doomed to Fail - and How to Save Them

Why do so many of us fail to keep our monetary goals, even when we know determining to save more, or earn a raise, or to stop racking up debt on the credit card are all actions that will enormously benefit our financial lives?
01/01/2014 06:57 pm ET Updated Mar 03, 2014

It is human nature to want to take advantage of a symbolical fresh start, to have our brand-new year be different than the last and free of past mistakes. Every year, we tell ourselves, "this year is the year I'll change!" The beginning of 2014 is no different. It's the start of another round of financial resolutions that are made in good spirits and optimism... and then forgotten about or given up on before President's Day.

So why do so many of us fail to keep our monetary goals, even when we know determining to save more, or earn a raise, or to stop racking up debt on the credit card are all actions that will enormously benefit our financial lives? Because we're falling victim to one (or more) of these 5 things that will doom anyone's resolution to fail:

1. Your Resolutions Are Vague
If you don't know exactly what you'll be working toward, how can you create a plan of action, measure your progress, and know when you've arrived at success? It's a bit like hopping behind the wheel of your car, punching the gas, and hoping that will be enough to get you where you wanted to go. Getting from place to place with your vehicle doesn't work like that and goals don't, either. You'll need a road map and a logical progression of steps to follow in order to succeed.

Save It: First, set a goal that is specific. You must be able to clearly articulate what it is you are trying to achieve. Second, make sure your goal is actionable, meaning you can develop a step-by-step plan for how you are going to make it happen.

For example, if you said "My financial resolution is to save more money in 2014," consider adding, "By participating in the 52 Week Savings Challenge." Now you have a specific goal to work towards and a clear course of action to take in order to achieve it. (Interested in participating in this challenge? Check out this worksheet to help you keep track of your progress.)

2. You Don't Make Your Resolutions for You
Your financial resolution is doomed to fail if you made it in order to please or impress someone other than yourself. You can't make real, lasting change in your own life when you're not internally motivated to make that change, or when the change you make leaves you feeling miserable and deprived.

Save It: Establish what your priorities are. Do you want to appreciate more of what you have and spend less? You can do it, but not if you give up your weekly latte because some financial guru told you it was necessary in order to spend less and save more. If you really want that coffee drink, depriving yourself of this treat will only serve to make you feel like your goal is a punishment.

Figure out what is important to you, and cut the stuff that didn't make it very high on the list. Maybe you could drop your cable subscription instead, or resolve to only buy used or swapped clothing instead of new this year. Don't be pressured into setting a goal that someone else thought was a good idea -- after all, that person might not miss lattes and therefore think a stop by the coffee shop is a frivolous expense, but perhaps they'd find it unthinkable to give up their current TV package while you'd be perfectly content without one. It's called personal finance for a reason.

3. You Forget Your Resolutions (or Don't Track Them)
See if you can pass this quick test: what did you have for lunch 12 days ago? Do you remember what you wore last week? It's very hard to remember every little detail from days, weeks, and months past, and the goals you mentally set for yourself in January will be replaced by other thoughts by June. Even if you maintained your resolution for a few weeks, do you know how much progress you made? You can't see things through an entire twelve months if you can't remember them or track the work you did in the past.

Save It: Your financial goals are not Ronco Rotisserie machines. There is no "set it and forget it" here. Remember your resolutions by writing them down and sticking them on your desk or on the fridge. Create a vision board that includes elements that remind you of your end goal. Are you saving up for an international trip? Stick a picture of a landmark in the country you want to get to on your board. Planning on upping your investment contributions? Create a graph of your goal net worth will be at the end of the year and include it.

Be sure to track your progress, too. When you reach a milestone or accomplish a task, allow yourself to celebrate and be proud of yourself -- and then cross that task off the list before you move on to tackle the next one. By having a way for you to look back and see how far you've come, you'll prove to yourself that you can make your goals happen. You can stick to your resolutions and make them into successes.

4. Your Resolutions are Without Support
It's hard to climb a mountain by yourself. Your financial resolutions don't have a good chance of success if they go unnoticed and unheard. Maybe your friends who are apathetic about their own careers don't understand your goal to pick up freelance work on the side in order to boost your income. Perhaps your parents think you're crazy for wanting to invest in more than just your employer's 401k plan. Anyone who doesn't support the goal you are trying to achieve (or worse, is flat-out negative about it), is someone who will help doom it to failure.

Save It: Establish a support system. It doesn't matter who you lean on for help, encouragement, or to speak a kind word when you need to hear it most, as long as they can be there to answer a phone call, text, or even an email or tweet. This could be your significant other, your friends, family, or even an online network of likeminded people.

The personal finance blogosphere is enormous and full of positive people that enjoy helping others. Whether you're trying to get out of debt, figure out how to earn more, or want to boost your savings and investments, you'll find a vast number of bloggers who are willing to chat with you, support you, and help you establish a great plan for accomplishing this year's financial goals.