5 Money Resolution Mistakes to Avoid in the New Year

As the calendar year draws to a close, many people begin thinking about their New Year’s resolutions. Spending more time with family and friends is likely topping many lists this year as are old standbys like exercising more and getting organized. Financial resolutions are also popular choices — yet they can be among the toughest ones to keep.

But certified financial therapist Erika Wasserman says that the way you set your goals has a big impact on whether you can achieve them. Here are some of the common mistakes people make when setting their financial resolutions, and a few tips on how to overcome them.

5 money resolution mistakes you can avoid

Mistake No. 1: Choosing goals that are too broad

When it comes to goals, Wasserman says bigger isn’t always better. Instead of setting lofty goals that can set you up for failure, break down your resolutions into measurable chunks that you can actually attain.

“Smaller goals are the ones that move the ball down the field,” she says. “The big plays happen a few times in the game, but more games are won by small, steady, solid gains. The same with personal finances.”

Mistake No. 2: Creating an unrealistic timeline

If you haven’t achieved your first goal in 30 days, Wasserman says it’s OK to shift it to one that you can obtain in the next 30 days. This isn’t taking the easy route — it’s helping you to maintain the motivation you need to reach the finish line.

“Starting the year off with a realistic goal — and a win — will set you up to be more successful for the rest of the year,” Wasserman says.

Mistake No. 3: Setting it—and then forgetting it

Many people come up with a resolution and some action steps, but then don’t follow through. But by keeping your goal in the mental rather than the physical space, it’s easy to lose track of it.

Wasserman suggests making some type of fun vision board for your goal, either digitally or on paper, and keeping it where you can see it.

“Write your financial goal down in a place you see every day,” she says. “This can be on a sticky note by your computer or on your bathroom mirror, changing your screensaver to an image referencing your goal or even setting a daily reminder on your phone.”

Mistake No. 4: Keeping your resolution to yourself

Finances can be somewhat of a taboo subject, so many people don’t talk about money with their nearest and dearest. But sharing your money goals with your friends or family can be a big help.

“There is a reason why people talk about their weight loss or the number of times they go to the gym with friends or on social media — it helps keep them accountable,” Wasserman says.

Choose a trusted friend with whom you can share your financial resolution. This person can help you brainstorm, serve as a sounding board for information and encourage you to stay on track. Having someone you trust who understands “the why” behind some of your financial decisions can help you feel less alone.

Mistake No. 5: Cutting out all the things you enjoy

While meeting your financial goals and working toward your money milestones are important, you also need to savor the life you’re living now. Wasserman notes that it can be easy to burn out or get frustrated when you don’t give yourself any rewards.

“Ask yourself: Can you shift a few behaviors to obtain your goals and still enjoy life? Find the areas that bring you joy in your spending,” Wasserman says, “then cut expenses that don’t bring you joy, or get creative on how you can scale back but still feel satisfied.”

For example, maybe your group of friends wants to plan a weeklong trip that will set you back a few thousand dollars. Could you join them for a long weekend instead that will cost just a few hundred? Finding ways to keep yourself from feeling deprived (or from experiencing FOMO) can help you stay on track for the long term.