Diana Clement: How to stick to financial goals

Set up a system of tracking. Goals need to be written down on paper.

Who plans to start 2023 with some new financial goals? Probably most of us. But making them stick is the problem.

Psychologists say ditch the resolutions, which are too easily forgotten, and go for goals instead. Make them: S.M.A.R.T. specific, measurable, achievable, relevant, and time-bound.

Whether it’s resolutions or goals, if you can find way to make your new habits stick, then you’re going to be in a better financial position at the end of 2023. That doesn’t mean you’ll be better off. Just better off than you would have been.

Your goals are your own. They might even be to spend more to enjoy what you have earned. But here are 10 thoughts to make them work:

1. Set actual S.M.A.R.T. goals. Being “better with money” or “not spending as much”, or “saving more” aren’t specific enough. It might be: “to have a three-month emergency fund saved by Christmas” or “up my KiwiSaver contributions from 3% to 6%”, or “pay off my debts”, or “pay down $x or x% of my debts by Christmas”.
   
2. Ensure you have short, medium, and long-term goals. Items you can tick off your list early will make it easier to tackle the harder ones.
   
3. Set up a system of tracking. Goals need to be written down on paper, in a spreadsheet, or in tracking apps. I’ve often heard that printing out your goals and sticking them on the inside of your toilet door, or on the fridge can help. Some people respond better to pictures of their goals rather than lists.
   
4. Create a personal budget if you don’t have one. This really is a magic tool and it changes people’s lives. When you have to a) stop spending in categories exhausted for the month, or b) are assaulted with your own, it sticks.
   
5. Be mindful. Mindfulness is about living in the moment, and reflecting on what you’ve done. Some people cringe at the mindfulness trend. If that’s you, think of it as smelling the roses.
   
6. Identify your excuses. I’ve often used the term “excusitis” to describe one of the biggest failings in personal finance. I hear it all the time. “That’s great advice, but my situation is different.” Usually, it’s not. It’s just that we are not self-aware.
   
7. List your weak points and work on them. Maybe it’s Buy Now Pay Later [BNPL], which is just too easy, and mostly available for non-essential items. Or you could be like me and sometimes have WTH moments. We’re all human. Perhaps your money goals are out of sync with your other half. I once read a book about positive thinking that suggested listing 10 things you want to work on. Then order them from 1 to 10 according to how difficult each is to tackle. Then invert the list and start by tackling number 10, 9, 8, and so on to get some early wins on the board.
   
8. Work with a buddy. That might be your partner, a relative, or a friend. Financial mentors are free through the government-run MoneyTalks agency, and can work with individuals on an ongoing basis. MoneyTalks’ mentors also organise MoneyMates groups, where people can share their problems and model good financial behaviour. A financial adviser can be helpful and will help clients with an ongoing journey, but generally make their money from commissions when they sell insurance or mortgages, or charge hourly fees. The other option when paying a professional is to get a life coach, or someone with higher training, such as a psychotherapist.
   
9. Plan some fun. The old adage “all work and no play (makes Jack a dull boy)” is true with personal finance. If you put on a straitjacket, you’ll fail. Budget for pleasures. But learn to enjoy small pleasures.
   
10. Diary time for monthly recaps. It’s no use setting up a system and not reviewing your progress. A monthly reflection on progress will pay bonuses in 2023.
    

Finally, it’s well worth both Googling “financial goals”, and also asking contacts how they go about goal setting - assuming they are actually successful.