New Year, new money

Fireworks light up Sydney Harbour with an early warm up session in preparation for its New Year's Eve celebration.

We’re running to the gym and chewing carrots. It must be January!  

After a couple of months of ingesting, imbibing, spending and swiping, so begins our attempts to make 2014 the year when we get everything right.  Well, maybe just better.

And we can make things better, especially when it comes to our money.  In the spirit of knowing the ‘enemy’ to win the battle, let me introduce you to what tends to trip up our best New Year's money efforts and what we can do to make 2014 the year that works:

The Money Is Just the Wrapping

We had on the show recently a couple with the financial resolution for this year to save more money and get out of a paycheck-to-paycheck way of life.  The Mrs. is a professional bookkeeper and her husband builds spreadsheets to track their spending.  But despite all this tracking experience, they can’t stop spending too much.  I pointed out to them that though tracking a behavior can change the behavior, they’ve set their sights on tracking the wrong thing -- the price tags, the money.  The numbers are a reflection of spending, but not the act of spending itself.

I nudged them to think about focusing on the behavior, not the dollars, to write down physically, with pen, or pencil, and actual paper, what they spent every dollar on, every day for thirty days.  They should also note how much something costs but by writing down the actual item and having to focus on the "what" vs. the how much, they'd have to process what their spending behavior actually is which can lead them to spend less.  

It was an "Ah-ha!" moment for them. So ask yourself: If you haven't had success with a money resolution that required you to change your behavior, were you focused on the right thing -- the 'what?' 

Your Resolution May Be a Blob

Resolutions without parameters and definition are amorphous -- they're blobs.  Blobs don’t stay in place and they don’t get you where you need to be.  You need your resolution to live in concrete.  Or, at least to include a couple of bricks.  

If I asked you what your financial resolution is and you said: "To save more money." Would you be able to tell me how much money in total and within what timeframe and where the money would come from?  

Defining the how-much, the how-long and where-it’s-going-to-come-from takes away the psychological barrier of ambiguity.  To spell out your New Year's resolution with as much detail as comfortably possible is to give it a better chance at life.  

Want to save money this year?  How much money? (Looking for a realistic, hard number here, people!) Why are you saving this money? And where will it come from?

Now, break it down further:  How much time do you have? That will help determine how much you need to save every month to get to your goal. Cutting long-term goals down into shorter and shorter timeframes -- in effect, creating mini-goals -- helps us celebrate mini-victories.  Every time you reach a mini-goal, that pat on the back makes it more likely that you'll keep going.  

Make your resolution live: give it definition. Give it a timeframe. Make it realistic and write it all down. Soon your 'blob' of a promise to yourself will be rockin’ a six-pack.

Why Are You Going At It Alone?

There's a reason why it was a big deal for Tyra Banks and her studio audience to show up with t-shirts emblazoned with their weight.: How embarrassing!

The same goes for money. It's hard to share our financial reality and goals with others. But, for most of us, social support is just what we need to stay on track. And maybe it's not so much the cheerleading, but having to be accountable to someone else for what you do. Being watched changes behavior. Add to that surveillance folks who love you and want to see you succeed, and you’ve got a lot of 'juice.'

So many of us keep our money struggles private. (How's that workin'?) But before you start sharing your 'bidness' on Facebook, make a tally of those folks who are there for you in good times and bad and of course, who won't tell the world your bank balance. Create a Facebook mini-support-group. You can set this up so only people you chose can see what you’re doing, not all your 'friends.'  Tell them what your resolution is and ask for support. Report in often and let yourself be called out when you stray. Just think of the shared joy when you’ve made it.

Sometimes it takes a village to reach the finish line.

About the author

Carmen Wong Ulrich is the former host of Marketplace Money, APM’s weekend personal finance program.

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