If sticking to a budget or getting out of debt is on your list of New Year’s resolutions , step away from the spreadsheets for a minute—achieving your money goals isn’t really about crunching numbers. Like any other resolution you make, it’s about big-picture thinking about what you really want out of 2012 (and beyond), and then breaking down that vision into baby steps.
Ready to get started? Here are five simple steps to making (and meeting) your money resolutions.
1. Do Some Introspection
It’s easier to brainstorm about 2012 money goals after a little reflection on the past year. What were your biggest money challenges, mistakes, or achievements over the past 12 months? Did you get further into debt, or buy a few things you didn’t really need? Or maybe you’ve paid off a student loan or improved your credit score .
Take some time to write down where you’re currently at financially, and the money lessons you’ve learned along the way, and use this list as the jumping-off point for your goals. If you learned, for example that you tend to make big impulse buys late at night, then maybe your goal will focus on keeping items in your cart for at least 48 hours. Or if you blew last year's budget on restaurant meals, maybe you'll try to cook at home more often.
2. Think Big—and Small
Setting the right goals is key to actually achieving them. Recent research suggests that being overly ambitious can actually sabotage our efforts, while being too specific can make it harder to re-adjust when obstacles crop up.
BJ Fogg , who heads Stanford’s Persuasive Technology Lab, suggests breaking down mega-goals into small, actionable steps. For example, if you want to save more money in 2012, what, exactly, do you need to do to make that happen? Set up an automatic payroll deduction? Give up your premium cable or weekly manicures? Take the subway instead of cabs?
At the same time, research by University of Delaware’s Julia Belyavsky Bayuk reveals that a too-specific action plan without room for flexibility can also get in the way of success. If you commit to bringing your lunch every day, for example, and then an out-of-town friend calls to meet up, or you leave your brown bag at home, your goal is sabotaged. So, a more flexible (and attainable) target might be to bring lunch three times a week.
3. Write Down an Action Plan
Whatever resolutions you come up with for the new year, you’ll increase your chances of sticking with them by mapping out exactly what you want to accomplish, with a specific timeline. What action items do you need to do every week? What should you accomplish in January? What benchmarks do you want to reach by mid-year?
Create a calendar reminder to check in on your progress periodically (every quarter or midway through the year). Think through how you’re doing, what’s working, and what’s not, and readjust as necessary.
4. Create a Vision Board
You might not think finance and art projects go hand-in-hand, but thinking about money in a more colorful way can help you stay motivated. First, think about what financial freedom means to you. What does it look and feel like? Does it mean having more time to pursue certain hobbies, the ability to travel , or spend more time with your family?
Creating a visual board with images cut from catalogs and magazines can help remind you what you’re moving toward. (You can also do this digitally using Pinterest , Photoshop, or the Moodboard iPad app .) Once it’s done, keep it somewhere you can see it. When things get tough (or when you’re tempted to buy that handbag you really don’t need), it will serve as a positive reminder of your goals.
5. Enjoy the Journey
It’s hard to stick with any plan if it makes you miserable, so think of a way to celebrate your new and improved habits along the way. Perhaps that means indulging in a fun date night after you meet a savings goal, or finally visiting that art museum you’ve had your eye on after two weeks of avoiding take-out meals. Even a visual reward, such as checking off your achievements on your calendar, can help you celebrate small victories.
Reaching your financial goals can feel daunting, but by setting the right resolutions, making a plan, and staying motivated to stick to it, you can get there. Here’s to a successful 2012!
Share this article on Twitter (hashtag #bettermoneygoals), and you'll be entered to win! Three lucky readers will receive Kimberly Palmer's 2012 Money Planner , an easy-to-use, step-by-step guide to making and tracking your financial, career, and life goals. Winners will be picked on Friday, January 6.