Making Better New Year's Resolutions

As we've just sailed past new years, everyone has New Year's resolutions on their mind. A quick read of popular media will reveal that everyone is abuzz about how they can make 2012 their best year yet. It makes sense, because the dawning of a new year is a great time to reflect and adjust.

The decision of whether to make New Year's resolutions or not always comes down to personal preference. Some people firmly believe that they're not a great idea, others unfailingly recommit themselves to self-betterment goals with each new year. For those of you who do make resolutions, I thought I'd share some thoughts on the matter.

I'm often startled at how often several common resolutions are featured in resolution lists. Think about it, how often have you seen (or used yourself) one or more of the following New Year's resolutions:

• Get into shape / lose weight.
• Get out of debt.
• Spend more time with friends.
• Take more time off work.
• Be better at managing time.

You've seen these before, haven't you.

Don't be ashamed if you've used one or more of the above yourself. Each one signifies a topic area in which innumerable people (present company included) desire improvement. There is absolutely nothing wrong with the topic areas that the above resolutions attempt to address. However, in my opinion, all of these resolutions, stated as they are, are severely lacking.

Let me explain.

Consider the worthy goal of getting out of debt. It's completely unquestionable that getting out of debt is a worthwhile goal to have, and it's perfect topic to create a resolution from. In my opinion though, in order to make such a resolution effective, we need to spend more time thinking about exactly what we want to achieve and how we're going to do it.

Be Specific About What You Want To Achieve
Creating a better New Year's resolution starts with being more specific. Desiring just to "get out of debt" is far too vague a goal to pursue. What is the time-frame? How much debt is there to pay down? How much progress could reasonably be made within the time-frame? All of these are crucial questions that should be answered when the resolution is formed. Without doing so, the person making the resolution is setting themselves on a course that is more likely to lead to failure and discouragement. Resolutions may not always be achieved, but they should always be achievable.

As you write your resolutions, consider stating them in a more specific manner and take steps to make sure that the goal you're making is both achievable and will encourage you to stretch yourself.

Getting back to our debt resolution, as an example, let's assume that I have $20,000 in credit card debt that I wanted to pay down. Let's also assume, that after my monthly expenses, I have $1000 left over. As this is credit card debt, I'm also aware that I will be subject to interest charges on the outstanding debt. I'm going to give myself a time-frame of one year to complete my goal.

Now I can form my resolution as follows:

"Within the next year, I will pay down my credit card debt to $8,000 or less."

A resolution like the above is far more specific than "get out of debt". By adding a few words, the resolution now contains a time-frame, a specific goal, and based on the parameters we thought through, we know it to be achievable. In addition, due to the added hurdle of handling the credit card interest expenses, we know that the resolution will still cause a sufficient quantity of strain to allow for personal growth.

Know (and Write Down) the 'How'
With our improved resolution in hand, we're ready to start thinking about the how. What must be done to achieve the goal?

Figuring out the how needn't be difficult. In fact, with a specific goal in place, it should be rather easy. Determining the how is just a matter of asking yourself questions similar to the following:

What steps must I take to achieve my goal?
What must I do to complete each step? 

Turning again to my sample debt-reduction resolution, the steps I must take include things like making regular payments, finding new ways to save money and avoiding spending money I don't have to.

My resolution becomes:

"Within the next year, I will pay down my credit card debt to $8,000 or less. I will do this by making bi-weekly payments, only purchasing what I need and finding one money-saving activity a week."

More details can be added as needed, but for the moment, my sample resolution is in good shape, and it has the ability to set me on a path destined for success. As you write your resolutions, think carefully about each one and state them in specific terms that are meaningful to you. A new year is a great time to adjust your course in life, so make it count.

Happy New Year!