New Year's resolutions usually focus on food and fitness, but there's no reason they can't also address finances. And to actually follow through on them, financial experts say it takes little soul-searching.
"Financial resolutions have the greatest chance of succeeding if they're tied to your values, says Toronto-based chartered accountant and financial consultant Robin Taub. "Values are the things in your life that are most important to you, that you are willing to take a stand for. Some people value education, achievement, prestige, or wealth. Others value security, family, friendship, or adventure.
"Financial resolutions or goals that come from your most deeply held personal values are much more compelling and motivating. As a result, you are more likely to achieve them."
Milton, Ont., certified financial planner Tim Niblett of Raymond James Ltd. says that turning resolutions into reality requires having a vision.
"Certainly no one would build a dream house without first having a vision of what it would look like when finished," Niblett says. "Your financial future deserves no less. The 'client vision document' [I use] is a documentation of what you want your wealth to do for you and your family now and in the future. As the saying goes, if you don't know where you're going, how will you get there?"
Mapping out exactly what you're working toward helps uncover people's emotions, which, like values, are powerful motivators.
"Anything that helps an individual or couple clarify what is important to them is time and effort well spent," Niblett adds.
Putting ideas into action
So being honest with yourself about what's important to you and what you want are powerful starting points. But to accomplish the goals you set out for the year ahead, there are other steps to take.
"Discovering your values can be very exciting and empowering," Taub says, noting that her book, A Parent's Guide to Raising Money-Smart Kids, has a tool called a Values Validator to help people nail down what they cherish. "Values are fundamental and rarely change; if anything, you become more passionate about them. But goals, especially long-term goals, are dynamic and may need to be revisited and tweaked as your circumstances change."
Once you've identified a few guiding principles, put them into action by creating SMART goals, Taub suggests: goals that are specific, measurable, attainable, realistic, and time-oriented.
It's more effective to say, "I want to put away $100 a month for the next year so I can buy a planet ticket to Paris" than "I want to be able to afford to go on holiday."
Another example? Say "I'm automatically withdrawing $50 every pay cheque and putting it into a savings account" instead of "I've really got to start an emergency fund this year."
SMART goals work when it comes to weight loss and they work when it comes to money.
Maybe you have several financial aims for 2013. Write them down in order of importance, and start with one or two. Trying to tackle too many at once may leave you feeling overwhelmed or discouraged.
If you're not sure where to start — maybe it's building your RRSPs or literally "Paying yourself first" — get help. Talk to someone, whether it's a financial planner, an advisor at a bank, or a trusted, money-savvy relative or friend.
Put things in perspective
Just as in life, try not to be too hard on yourself if you have a lapse. There's no sense beating yourself up. On the other hand, make a deal with yourself that you'll reward yourself for following through. Maybe at the end of January you can treat yourself to lunch out with a friend.
And remember success in itself is a motivator: stick with your resolutions for the month of January. Chances are you'll feel so proud of yourself that you'll want to do it again and again.