Just out of curiosity, I’ve been asking my members what some of their resolutions are for this year. Perhaps it was the environment in which the question was asked, but almost everyone who set resolutions had something related to their finances on the list. I can’t say as I blame them, 2008 wasn’t good to most of us financially.

I do some freelance writing for another site called First30Days. What I love about this website is that it focuses on change. It takes you through any change in your life in 30 days with tips, advice, expert opinions, and a community open to discussion. I bring it up because they’ve put together a free guide to New Year’s Resolutions and since the trend this year is to stick to our resolutions, the guide is becoming quite popular.

It has a great section called resolution mistakes and how to avoid them. Now, as is it’s laid out in the guide, these apply to any new year’s resolution, but since this is a personal finance site, I’ll explain how it applies to those of us looking to improve our money situation this year.

# 1 – Making your resolutions January 1st

This is a big no-no. You’re still reeling from the holidays and all that entails – leftovers, getting back into a routine for work, and winter weather. According to First30Day’s guide, 80% of people who set their resolutions in the first two weeks of January end up failing. So they recommend that you wait until you’re actually ready to make a change before setting your resolutions. Instead of the 1st, try waiting until mid- to end of January. That way you’re settled into your routine and feel you can adequately devote yourself to your goals.

This is especially good if your resolutions involve money. The first two weeks of January you’re probably feeling a little buyer’s remorse for that money you spent over Christmas. By waiting until you’re ready to make the change, the energy of wanting to change – as opposed to feeling you “have” to change – will help carry you through until the task is complete.

# 2 – Getting into a hurry

We are a society of instant gratification, which is the reason we’re so immersed in debt. But, the problem most people have with new year’s resolutions is that they don’t see results right away and they become discouraged. Understand that your life could be very different in six months. Maybe right now you want to focus on your retirement and building that account. But, three months down the line something comes up and now you have some debt to work on. Just because you have to switch focus a little doesn’t mean that you have to give up your retirement goal.

Try to avoid calling them “New Year’s” resolutions. Just stick to resolutions or goals. The phrase ‘New Year’s’ implies that you must accomplish these goals within this year and that simply isn’t the case. Make reaching your goal more important than the timing and you’re more likely to succeed.

# 3 – Believing you’re all alone

First of all, you’re not the only one making resolutions so get some friends together and form a support group. Having that group can really help keep you motivated as you each work towards your specific goals. Beyond that, there are others who’ve done what you’re doing now. Many of them succeeded and are valuable resources. Ask them what they did and how they accomplished their goals. Let’s say your goal is to retire are 30. Great! Find someone who’s done it and ask them how. There’s no reason to think that just because these are your goals that you’re on your own, sink or swim.

# 4 – Overfilling your plate

I’m so bad about this, it isn’t even funny. If I fail at a resolution, this is why. If your resolution list is a mile long, you’ve got too much going on at once. The brain works better when it has one or two things to focus on; and if you’re terrible at multi-tasking, it’s better to just stick to one thing. Once you’ve completed those items, if you feel motivated to do so, move on to something else that you want to change….at THAT time. Don’t overwhelm yourself all at once.

When it comes to money, we often want to do it all: decrease spending, increase savings, build up our retirement, pay down debt, and sometimes we worry about paying for our kids’ college, too. That’s too much all at once. Figure out your priorities and focus on one or two at a time. Now, that doesn’t mean you neglect any of the others, it just means they are not your focal point, so you’re not expending the time and energy worrying about making giant contributions to them.

# 5 – Living in the past

We’ve all made mistakes, and no matter how much we want to, we can’t go back and change them. We’ve all been in that boat where we set out to make changes in our lives every year and midway through January, we give up. Stop dwelling on it! Move on to your new resolutions and find ways to improve your results. Past mistakes don’t predict future failures when it comes to resolutions because it’s all about how much you want it.

If every year you resolve to pay off your debt and three years later you’re still trying, don’t let it discourage you. Perhaps you weren’t ready before. Or perhaps you were still addicted to debt. In any event, letting past mistakes dictate your decisions going forward only inhibits your true potential.

# 6 – Believing your resolutions define who you are

If you’re the type to obsess over the changes you want to make every year, then you’re stressing yourself out too much. That much pressure is one of the biggest reasons people will quit their resolutions. Don’t do it. You’re still a person worth your salt whether you complete this resolution or not. Ok, so you didn’t accomplish your savings goal last year. Instead of letting it make you feel worthless, focus on what you did accomplish and keep working on your goals.

# 7 – Making a marginal attempt at success

I don’t really have to go into a lot of detail with this. You get what you put into it when it comes to your resolutions. If you resolve to make a significant dent in your mortgage’s principal balance, but you don’t try to scrap a little more to send in, then you have no one to blame but yourself. You have to put effort in this, otherwise, what’s the point of even suggesting a resolution? If trying to come up with a little extra money to send in for your mortgage seems too difficult, consider bi-weekly payments. It’s the same concept, but it may help you and basically adds an extra payment a year to the loan. If you’re not fully committed to the resolution, you will find any excuse available to break it.

# 8 – Forgetting the clean slate

Too often people assume that once they fall off the bandwagon their shot’s over until next year. How ridiculous! You’ll never succeed with that kind of attitude. First30Days uses the analogy of a GPS Navigation system in your car. It only cares about two questions; where are you now, and where do you want to go? It doesn’t care if your took a wrong turn somewhere, it will start over for you if it needs to. If you make a mistake, that’s ok. Dust yourself off and try again. Resolutions should be daily commitments and not something you do at the beginning of the year because it’s tradition.

If your goal this year is to reduce your spending, but Macy’s has a huge store closing sale and you splurge, don’t beat yourself up about it. Examine why you spent the money so you know what to watch out for next time and then move on. Give yourself a new slate and persevere. Rome wasn’t built in a day!

# 9 – Not recognizing yourself for the small victories

We all like encouragement and acknowledgement for a job well done. It isn’t necessarily required that we have a big public display, but even at work, when we’ve done well we hope that someone has noticed. Why should we be any different with ourselves? Our brains like to know that it’s on the right track, so when you’ve accomplished a small victory, congratulate yourself!

This is why people feel they can’t succeed with the traditional debt repayment plan and turn to Dave Ramsey’s plan. You have to break your big goals into smaller milestones and celebrate your achievements. If you’ve got a $25,000 credit card maxed out, but you get $5,000 paid off, you deserve a little praise for that. It’s not easy to pay $5,000. When I started on my repayment plan, I’d be lucky if I could pay $100 and keep that paid off. More often then not, I spent that $100 and had to start over again. So, celebrate the small victories!

# 10 – Giving up

Staying on track with your resolutions is tough. It takes commitment and dedication to get there. But you CAN do it. You just have to realize that you’re not a quitter and you’re stronger than you give yourself credit for. If you make a mistake, shake it off and move on. Don’t quit. This is so important when it comes to your financial situation. We all dream of having more money, being debt free, and living the American Dream (pre-economic meltdown). There will be challenges along the way. Suck it up…seriously. You can do it!

Be sure to check out the First30Days guide for more tips and information on sticking to your resolutions, whether they’re financial or not!

Do you think you’ve failed at past resolutions because of any of these? Are there other factors that contribute to whether or not we succeed at our resolutions?

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