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As the clock ticks down and champagne corks pop across the country ushering in the New Year, many Americans are focused on making sure their 2019 is better than 2018. From spending time with family and friends to cutting back on watching the incessant quarrels on the news, Americans want to focus on creating greater prosperity in their lives in the coming year. It’s only natural, as a new year dawns, to embrace making New Year’s Resolutions.
The Proof Is in The Pudding
Financial resolutions are about goal setting, which is integral to financial planning. People who make them and take them seriously, often achieve greater financial success. In Fidelity’s Tenth Annual New Year Financial Resolutions Study, 48 percent of Americans surveyed focus their financial resolve on saving more money and paying down debt. Further, when considering the prior year’s resolutions, 42 percent say their situation has improved because someone in the family is saving more money.
Clearly, resolutions help move us closer to our goals. But simply making resolutions might not be enough. In any financial experience, there will be ups and downs. Fidelity’s survey found that 58 percent of those who made financial resolutions made mistakes, including spending too much on going out, paying unnecessary fees or taking an unplanned trip. Such mistakes might be significant enough to derail the individual’s success.
Financial experts believe that a key factor in successful financial resolutions is gratitude. That may sound trite, but numerous studies have shown that expressing gratitude has a positive influence, even for people experiencing challenges.
“There is so much power in gratitude,” says Vanessa Smith, CPA, founder of MintWorthy, a financial coaching site. “I find that when my clients express gratitude for where they currently are, it creates a powerful mindset shift in which they are more grounded and present with their money. They are able to make more informed decisions about their financial future.”
Financial professionals find that in our digital age, incorporating gratitude in financial goal setting is even more important, as individuals constantly compare themselves to others.
“Because social media is an important part of our lives, it’s easy to lose perspective and compare your accomplishments with those of your peers,” says Samuel Deane of Deane Financial Partners. “Gratitude is the experience of counting one’s blessings, which has been proven to lead to a greater sense of well-being and a better ability to handle change.”
The fact is, comparing yourself to others can upend your financial progress.
“Not only will a gratitude practice help make investors happier, it staves off many of the factors that cause them to make killer mistakes,” says Patrick King, founder of Transformative Financial. “When it comes to combating comparisons to a reference group (i.e., keeping up with the Joneses) or tempering pessimism during a drop in the market, a gratitude practice becomes a practical tool to keep money in your pocket.”
Be Present and Write It Out
Financial experts also find that financial resolutions work when individuals stay in the moment. That is where gratitude creates a foundation. While resolutions address future goals, it is more important to focus on being emotionally and mentally present.
“When looking at the future, there are too many variables to figure out exactly how something might work,” says Walter Wisniewski, CFP, of Arcadia Wealth Management. “The secret to staying grateful is to stay in the present moment and appreciate everything we have and can control. Focusing on what we can control helps us feel safe and connected.”
Experts recommend writing out your gratitude to help you connect your financial resolutions to the present. Many planners work with their clients to help compose their expressions of gratitude.
“It can take time to reach our goals and where we want to be; in the meantime we need to see the abundance around us,” says April Caldwell, a holistic money coach with her own firm. “There are several ways to express gratitude, from journaling to creating a bullet point list. This is important because it helps to make people more aware and intentional with their choices, ultimately creating a better financial situation.”
Counting Your Blessing
As the clock counts down on New Year’s Eve, most financial experts would tell you to embrace the practice of making financial resolutions but be sure to be kind to yourself in the process. Financial success is a long journey. By staying present and not trying to keep up with the Joneses, you can embrace the concept of gratitude. Whether you keep a journal or talk with your financial planner about what you have appreciated on the journey to financial success, you will be able to make better decisions in the new year.
