“Good resolutions … [are] cheques that men draw on a bank where they have no account” - Oscar Wilde

January 1st, as we all know, is the Gregorian calendar’s first day of the year.

Just 18 days after it is ‘Quitters Day’, which is when most people tend to abandon their New Year’s resolution(s). This study, conducted by the fitness app Strava, also found that a whopping 80% of these resolutions fail… by the 2nd month itself!

The key here is ‘resolution’ around a landmark — whether that is the Islamic New Year or any other such occasion!

Now, this is certainly not to diss resolutions. Especially financial resolutions, which can at least give a good starting point in one’s journey. However, something more is required here.

What’s the Problem with Resolutions?

Many, actually.

As we said earlier, resolutions certainly present a noble goal. However, the parts that often remain unanswered are the Hows, Whats, and Whys’?

How do you view your finances currently?

What milestones do you wish to reach with your finances? Like, say, planning an overseas vacation, your child’s higher education, grand marriage, your retirement, or more.

How exactly do you plan to reach your goals? As in, how do you plan to save more, invest better, or earn more?

Not-So-Great Effects of Enthusiasm

Being preoccupied with a good starting point to make resolutions and sort out your finances banks a lot on your enthusiasm, which is certainly great to push you to make the necessary changes.

With the motivation at its peak, however, we tend to break down our goals in big chunks that can be, well, pretty vague or unrealistic to accomplish — especially on our tough days. One bad day, and suddenly binge or stress shopping doesn’t look so bad afterall?

This, in fact, is often tied to procrastination.

Motivation is definitely needed for this journey. But if there’s just one big resolution (say, become a millionaire in the next decade or cut down all needless expenses), a single setback can be enough to shake off your determination.

Suddenly, the ‘next’ major event seems quite appealing to start all over again. And, as we know, this cycle keeps going on.

So What’s the Way Out?

1.) Just Start Whenever

No really.

Your savings and finances are pretty important. So why wait for a particular date to start? With finances, each day is good enough to start.

2.) Solid Foundation of Self-Awareness

To formulate a proper financial plan that you would actually stick to come what may, you would need a rock-solid foundation rooted in reality first. It’s absolutely vital to be obsessed with the minor details and be aware of your spending, savings, and earning (SSE) patterns before taking the first step.

The way out here lies, again, in some questions that you must ask yourself.

For instance, are you a minimalist or a compulsive spender? Or do you belong to the former but switch sides when facing any stress?

Similarly, do you spend first and save the leftover or vice-versa?

How about the scope for improvement in your salary?

All these (often-uncomfortable) questions can reveal a great deal about your SSE patterns. This makes for a great place to start.

3.) Chunking the Goals

Remember when we discussed being ‘obsessed’ with details? This applies to goals as well.

Contrary to popular opinion, it’s actually wise to break down goals into really small chunks that are hard to fail at. This way, you can have continuous small victories to keep your morale high and stay on course.

For instance, if you don’t save and use your credit card multiple times a week, starting small would be quite beneficial. You can try saving 1% of your income and cutting down on just 1 unnecessary expenditure in the week. Of course, with time, you can ramp it up and go for loftier goals like 20-30% savings and more.

4.) Remembering That It’s a Long Journey

The whole point of stressing against over-dependence on resolutions comes from the fact that financial goals represent a long journey. Owing to changing circumstances over time, it’s important to keep our focus on the larger goals while being flexible in our approach and incorporating more elements over time.

Thus, while we start small, we can keep learning and experimenting more with time. You can, for instance, try your hands on side-hustles for side-income, different types of investments (stocks, bonds, and more) to diversify, and more.

Remember - It’s all in the small steps and changes…

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Written By: Abhimanyu Chaturved