Checking in on Your 2021 Financial Resolutions

At the end of last year, I discussed the value of creating actionable financial resolutions for the coming year. Like most people, I chose a few resolutions for myself for the coming year, and for me, two of them are still going strong using the strategies mentioned in that article.

As the first quarter of the year begins to wind to a close, now is a great time to step back, look at your resolutions that you chose at the start of the year, and figure out how they’re doing and what you can do to jump-start them again if you’ve fallen off the path.

How are your resolutions doing?

Obviously, the first step with such a checkup is to simply recall your resolutions that you made a few months ago. Ideally, you can recall them immediately because you’ve been either actively pursuing your resolutions or because they’ve at least been on your mind. However, if they’ve faded, you may need to check your own notes.

One very useful strategy is to give yourself a score on your progress on goals. It’s a good idea to do this once a month or so, if not more frequently (which is good if it’s a short-term goal, like a 30-day goal or a three-month goal). Ask yourself whether you’ve been doing your best to make progress on this goal. Try to couch that score entirely on your own effort toward the goal, not on external events or things outside of your control. Have I been putting in the effort?

I recommend giving yourself a score from 0 to 10: 0 means that you haven’t done anything at all; 10 means you cannot conceive how you could have put forth more effort without significant life disruption.

For example, let’s say I’m trying to build up a $2,000 emergency fund this year. I’ve got about $600 in there, which means I’ve been working hard at that goal, but I’ve also spent some money on some foolish things. I’ve done a lot, but I could have done a little more. I’d give myself a 6 or a 7.

On the other hand, maybe I’m trying to lose weight. I’m down about six pounds, but that’s far below the 1.5 pounds per week goal I set for myself, and I’ve barely done anything for the last month. I’d give myself a 2 or a 3.

It’s very rare that you’ll find that you have a 10 on your self-scoring of your progress toward a goal. If you have, great! Keep rocking it!

If your score is anything lower than a 10, that means you know that, on some level, you could have been realistically doing more to make that goal happen.

There can be a lot of reasons for this, but two of them really jump to the forefront. One is that you simply set an unrealistic goal for yourself. It’s not that the goal is bad, but that you set up something that requires more effort than the contours of your life allow you to give. The other is that you aren’t focused on daily action.

Let’s start with the first one.

“Turn a six into a seven.”

If you’ve found that you’ve bitten off more than you can chew with a goal and that the effort required to give a consistent 10 on that goal is something you’re really struggling with, I encourage you to step back and not worry about hitting a 10 right now.

There are two big reasons for that. First, it’s very likely that a 10 really isn’t realistic and that whatever you’re thinking of as a 10 requires significant life disruption. That’s not a good metric for a 10. A 10 should be a very consistent, strong effort that doesn’t require overhauling your entire life.

The other problem is that some resolutions and goals, particularly ones that require a massive shift, are possible to do at a 10 level but are difficult to maintain. For example, a resolution to “work out every day” for someone who hasn’t worked out much is likely to fall apart pretty quickly due to sore muscles. There’s a lot of pressure to not work out when every muscle in your body is stiff.

You can solve both of these issues at once with a simple step. Rather than trying to heroically rescue your goal, instead ask yourself what you can do to raise the number by one (or two) if you were to score again a month from now. What can you do to raise a 3 to a 5? What can you do to raise a 6 to a 7?

Most of the time, all you really need to do to bring about that change is to make a minor tweak to what you’re doing now.

Let’s look at that $2,000 emergency fund goal. You have $600 in there, but you were fairly wasteful with money, so you gave yourself a 6. What would you need to do in the next 30 days to raise that 6 to a 7? That type of improvement means taking it seriously, but not a radical shift. It builds on the good aspects of what you’re doing.

So, maybe you decide to take a real look at your spending over the last month and find some things to discard going forward. Look for things you spent money on that you don’t remember and things that don’t bring you a strong positive feeling, then aim to trim those expenses going forward. Commit to doing a frugal project once a week (like making some meals in advance or air sealing your windows with caulk), and literally add them to your calendar and to-do list.

When you look at your goal again in a month or two and score your progress again, perhaps you can give yourself a 7. Then, you can ask yourself what you can do to lift that 7 to an 8.

What can you do today to bring that goal forward?

Another issue that many goals and resolutions have is that they’re not really focused on daily actions. They offer a really good general direction for life or a big thing that you’d like to change, but that change isn’t translated into anything you can practically do today.

For example, someone might have a financial goal of “paying off all debt,” which is a great goal to have, but it doesn’t translate into daily action very well, and without daily action, it is extremely easy to cast a goal to the side and forget about it.

A much better approach is to seek out some strategy for approaching that goal that involves daily action. In other words, every day you should ask yourself a simple question:

What can I do today to bring that goal forward?

Put that on your calendar or your to-do list so that you see it every day. Add it to the reminders app on your phone so that it pings you in the morning. Whenever you see that question, think about it. Think about something concrete you can do today that will help you with your goal.

For a lot of financial goals, a frugality step works well. Perhaps you can do something today that will help cut your costs going forward. You might also have something professional that you can do that will help increase income.

The exact step depends heavily on the specifics of your life and of your goal. You have to answer that question each day for yourself, and then take action on that answer.

The thing is, once you make that the standard way of doing things, the goal starts to become a system, one in which the routines of your daily life naturally move you toward your goal. That’s where the magic happens.

Don’t despair if your goal isn’t where you want it to be.

If you started a resolution this year with all kinds of good intentions, only to find that things aren’t turning out as you want, don’t give up hope. You can turn things around.

The key thing to remember is that even a tiny life change, if you stick with it, can have profound effects given enough time. If you change your spending by $1 a day, you’ll have thousands before long. If you cut your calories by 10%, you’ll slowly lose a ton of weight.

You don’t have to make radical changes to change your life. You just have to make changes that you can stick with and constantly apply. That’s the route to success with almost every goal and resolution.

Good luck!

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.