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Why “Save More Money” is a Lousy New Year’s Resolution – and What to Do Instead
We made it! 2016 is in our rear-view mirror, and we are welcoming 2017 with high hopes that this year will be much better than the last.
The gyms are crowded with new members, diet programs are getting all kinds of new subscribers, and self-help books and cookbooks are flying off the shelves. It is that time of year when we make resolutions to drastically change our lifestyle for the better, only to fall off the bandwagon by February. It’s a time-honored tradition, after all!
I have nothing against resolutions. The new year is a great time to evaluate what worked and what didn’t last year, and to make a conscious effort to improve yourself this time around. However, we can’t expect to do a 180 overnight.
One of the most popular new years resolutions is to save more money. Lots of people make this resolution (I have made it in the past), and very few have followed through.
That’s because it is a bad resolution. Sure, it’s a wonderful idea, but it is almost guaranteed to fail for a few reasons.
First, “save more money” is vague.
“More money” isn’t a number. Do you mean more than last year? If so, how did things go last year? What were you able to put away? See… there is a heck of a lot more to think about than just general statements of your intent to save money.
It isn’t motivating.
When you don’t have a real goal of how much you want to save, it is really hard to be motivated. Instead, think more specifically about what you want to achieve by saving money and then build it into your resolution.
Much better resolutions would be things like “save money for Disney World” or “save up an emergency fund.” Both of these are much more motivating goals, because there is a purpose and a specific amount of money that needs to be in the account before you can check it off your list and give yourself a pat on the back.
Having a specific goal for the savings PLUS an actual number for how much you want to save puts power behind your resolution and will keep you fired up about it, even when times are tough.
“Save more money” isn’t a plan.
You really have to have a real plan. Where are you going to save the money? Under the mattress? In a savings account? How will you protect that savings account? What about your 401K or IRA?
How much money per month do you need to put away to reach your goal? Are you going to move the money over automatically with every paycheck? Or maybe you are putting away loose change? It doesn’t matter what you do—just have a plan for what it will look like to actually be getting it done.
A great alternative to the basic “save more money” resolution is a resolution to pay yourself first. This means move money to savings as soon as it hits your account and pay yourself before you pay the bills and go grocery shopping, and you will be less likely to miss the money.
Even saving $5 a month—though it is a small amount—is a plan! Have a plan and get it done.
Resolving to “save more money” doesn’t result in changed behavior for long.
This is a big one. You could have all the best budgets in the world and even a personal accountant in your corner, but you will still spend every penny you manage to save…unless…
You resolve to be content.
What? That seems so random, right? It isn’t even a financial term, yet it is the most important financial principle to put into practice if you want to turn things around in 2017.
Be content with the meals you have planned and save tons of money on food and restaurants.
Be content with your car.
Be content with your stuff, your home, and your clothes.
Be content with the material things in your life in order to STOP overspending and get your finances turned around.
Contentedness goes against the grain of our culture that is built around credit, advertising, mega malls, and McMansions. So it takes practice. It will take years to finally have it down, but each step you take to really appreciate what you have and stop consuming stuff to keep up with the Jones’s is a massive leap forward toward financial freedom.
The first step is just to be mindful of when discontent starts to creep into your life. Recognize it for what it is, and make a plan to tackle it.
Being content is my resolution for 2017… and if you want to do something bigger than simply “save more money”, you are welcome to join me.