As one year comes to a close, many people like to take a few moments and think about the year ahead. The setting of New Year’s resolutions is a time-honored tradition and a recurring theme at the end of each year. The new year has always been a chance, although somewhat arbitrary, to give yourself a fresh start. It’s a second chance. It’s an opportunity to recommit yourself to the things that are important to you.
Discussions of New Year’s resolutions are almost always followed by statistics showing how people generally fail at keeping the promises they make. News reporters and authors cite the spike in new gym memberships after the new year and the quick fall-off of gym participation as one example of how people with good intentions don’t stick to their plans. Studies show how financial New Year’s resolutions fail.
The backlash against the process of setting New Year’s resolutions is taken over by management experts who say the problem is that resolutions do not take the form of goals. If people stated their resolutions in a format enjoyed by corporate project management gurus, the SMART goal system for instance, people would have a better chance of sticking to their resolutions.
SMART is an acronym that most Consumerism Commentary readers are familiar with. These SMART goals are specific, measurable, attainable, relevant, and time-based. It’s not a bad system for evaluating employee performance, and the SMART concept can be extended into other areas of your life, like planning the activities you want to undertake in the new year.
Guess what? Whether you define your plans for the new year as broad resolutions or specific SMART goals, you’re just as likely to fail. People don’t want to stick to specific goals in the personal lives when they already have pressure from work-related goals, assigned by their employers, their clients, or themselves as business owners. The probability of people making charts to track progress on personal goals and sticking with it for more than a month is the same as the probability of sticking with a resolution.
SMART goals might make you feel better about your plans if you like treating your life as a business, but in the end it’s no more effective than setting resolutions. You can’t take someone who wasn’t going to keep his resolution, teach him about SMART goals, and expect that he will turn into a productive individual in his personal life. Now, treating your life as a business can be a good idea — after all, you are not only the Chief Financial Officer of your own life, you’re also the CEO. And if you are in the habit of looking at your life from that approach, you’re all ready more likely to keep your promises to yourself, whether they be resolutions or SMART goals.
Because of this backlash against New Year’s resolutions, people have yet another reason for not keeping their promises. When it’s a widely accepted fact that people do not, in general, maintain their resolutions more than a month or so into the new year, people don’t feel much pressure to continue. Well, the internal monologue goes, people don’t really keep these resolutions, so it’s no big deal if I don’t keep them either. The culture of mediocrity makes it easier for people to give up.
Setting New Year’s resolutions are beneficial, even if you don’t keep them. That’s because reflection and self-analysis are important pieces of living your life. If you take the time to make resolutions beyond “losing weight” and “saving money,” you’re asking yourself questions that get to the core of your identity. Having a good understanding of where you are and where you’d like to be provides more direction for your life.
The New Year is a time for renewal. It’s arbitrary, but so what? January 1 is as good a date as any to examine yourself and rededicate yourself not just to your goals, but to who you want to be as a person. This starts with a mission statement.
1. Define your personal mission statement.
Non-profit organizations have mission statements that define the purpose for which they exist. For example, this is the mission statement for the Boys & Girls Clubs of America:
… [t]o enable all young people, especially those who need us most, to reach their full potential as productive, caring, responsible citizens.
Some organizations have mission statements that fit within one sentence, like the Boys & Girls Clubs of America. Some are several paragraphs long and go into great detail. I created a mission statement for Consumerism Commentary, even though it’s not a non-profit organization, because I feel every organization should have a mission. The mission of Consumerism Commentary is to develop financially literate, capable, and successful human beings by sharing educational, entertaining, and engaging writing. (I also developed a separate vision statement and purposes, including a hidden purpose for the website and business, which you can find out about here.)
A mission statement gets to the core of your identity and your values. Your mission statement could cover an area of interest you’re passionate about, it could pertain mainly to your role within your family, or it can even be based on values from your religion. I’ll write more about my personal mission statement in an upcoming article.
Once you have a mission statement, you can evaluate your goals and activities based on how closely they relate to your mission. When a non-profit I worked for received a project proposal, if it didn’t fit into the organization’s mission, management would not consider the proposal. At the same time, a mission statement is a living document, which means it can be reevaluated, updated, and changed over time, to fit changing demands of the world, the organization, or life.
2. Evaluate the last twelve months.
There have most likely been a few moments of pride in the course of the last year. You probably also had some disappointments in your life. The key is determining which aspects of your life in the past year were within your control and which were outside of your control. When you begin to look closely, you may see that more things are within your control than you might first believe.
How much time and effort you spend evaluating the past and present is up to you. You can’t dwell on mistakes you made in the past, but you can try to learn from them, and help your past determine the best strategies for improving your future. The bottom line is to determine whether you are closer to your mission today than you were a year ago. Your mission is an ideal, a wish that can never be completely fulfilled. It’s a non-SMART goal. It provides the path so you are always moving in the right direction — a journey, not a destination.
3. Where do you want to be twelve months from now?
With your present in mind, you can set your targets for the next year. This is where your mission and resolutions come into existence. Your mission helps you determine your resolutions — any resolution you pick must be somehow related to your mission. Whether you want to set SMART goals or operate at a higher level is up to you; the process of consciously contemplating these issues and making informed decisions is what will set you apart from people who blindly decide to “lose weight” and “save money” in the new year.
You may not end up exactly where you want to be twelve months from now, but if you live your life with a purpose and you strive to make informed decisions and best choices, you’ll move in the right direction.
4. Quantify yourself.
We’ve become obsessed with quantification in a number of areas of our lives, and it may have started in personal finance. We have software like Quicken to thank for that. Now it’s even easier, with mobile applications that provide us a way of tracking personal data on a minute by minute basis. Thanks to mobile apps, we know at any time how much money we’ve saved. We know how our investments are performing with real-time stock quotes. We know how many steps we’ve taken each day. We check our heart rate after each time we exercise. We know how many miles we’ve run over the past month. We know how much weight we’ve lifted and track when we beat our own personal records.
It’s easy to get lost in all these numbers, and there are privacy concerns about sharing these numbers with applications who may use the information to profit. But if there’s something numerical that can be tracked, there’s a good chance there’s an application that will allow us to do just that. And where there was a time that we’d have to track results manually and build our own charts, now that this is mostly automated, we can get the benefit of data visualization much easier.
Data visualization, in turn, provides great feedback when it comes to progressing towards measurable goals. That’s one of the primary purposes of Naked With Cash here at Consumerism Commentary. If you are interested in the typical New Year’s resolutions of saving money and losing weight, don’t just wish broadly, don’t just make SMART goals, but use these tools to motivate you.
5. Get an accountability partner.
Self-motivation is difficult, and there’s no reason to torture yourself for not sticking to your goals. The solution to waning intrinsic motivation is to team up. For years, I was looking for someone to be my accountability partner in terms of my health and fitness. I kept hoping my girlfriend would be interested in taking this journey with me, but despite my efforts, we did not share this interest. I joined a gym, and for some time, the monthly payments motivated me to seriously begin moving forward. That lasted about six months before I lost my motivation.
It wasn’t until I hired a personal trainer that things started to move in the right direction. My trainer is an accountability partner. I have regularly scheduled appointments that I know I can’t miss. I know I’m moving in a much better direction now.
Your spouse can be your accountability partner if they are just as passionate about your mission as you are. But if not, or if you don’t have a spouse, you may need to look to someone else. With a friend, mutual motivation is a strong bonding agent; but if you don’t have someone to support and motivate you, hiring a professional is not a bad idea if you can afford it.
It doesn’t matter whether you choose to make high-level resolutions or SMART goals when the new year comes around. The process of self-examination is what’s important. The reminder of your mission and your motivation to stay on a positive path is what brings you success year after year. Most people forget their resolutions and SMART goals after a month or two, but if you get in the habit of evaluating your choices and your progress, it doesn’t matter whether you reach your goal of losing 50 pounds or paying off $50,000 in debt by June. Continuous analysis guarantees you’ll be moving in the right direction, aligned with your values and your mission.