3 Don't Dos For Your Financial Goals In The New Year

There's always a warm fuzzy feeling that's associated with the thought of personal growth, and most of us will have set, or be setting, new goals for the new year.

Lose X weight, save Y money and read Z books are likely to be popular candidates in the goal setting world and you're likely to have heard someone in your own friendship or family circles mention something along those lines, if it wasn't you mentioning it in the first place.

I myself am no different.

But have you ever wondered why everyone is always motivated during January, and maybe even February, but by the time March comes around the majority of people have stopped pursuing their goals and have automatically regressed back to old habits?

I find it is most obvious in a gym where there is a January surge but give it a few weeks and you'll notice it's pretty much back to the same old regular people from last year.

Having reviewed my own goals from last year and successfully achieving around 80% of them overall, and actually exceeding all of my financial goals, I have 3 tips on things to avoid doing based on my own experience and observations that I think can help you stay on track.

Don't talk about your goal

This may sound strange but there are science backed studies that suggest that if you publicise your goals then you may actually become less likely to follow through with them. This is especially the case with identity related goals but I believe that the effects are applicable in some manner to financial goals also.

It may sound logical to believe that if you state your goal to the people who are close to you - such as friends & family - you will have some sort of support network who will hold you accountable for the goal, and help motivate you as time passes; but this doesn't always work.

In fact the initial encouragement you receive from the people around you when you speak about your goal could instead give you a false sense of achievement, known as social recognition.

This can make you feel as though you don't need to work as hard anymore - even though you've literally done nothing besides talk about your goal - as you're already receiving some level of praise. Why keep working for the recognition if you're already getting it right?

You also want to be aware of any negativity when it comes to your ambitions.

While it's nice to think you'll always be encouraged, you have to also remember that you can also be challenged. People may ask "how" you're going to achieve such goals or start giving their own opinion on what a "better" method might be.

It can be quite a drain on your energy to need to defend or explain your goal to someone else.

They may even have the best intentions by asking or offering their opinion, but since the goal isn't personally theirs there is always going to be a gap in terms of emotional understanding that you should be careful of.

Take financial independence for example - often it will involve becoming very deliberate with your finances so that you can increase the amount you are able to save and invest. Here's a couple of responses that you might hear if you reveal your plans:

"You'll be sacrificing the enjoyment of life today for a future that may never come. You never know what could happen tomorrow!"

"That sounds really boring and depressing - why live so frugally when you're not even a student anymore?"

"Investing in the stock market sounds risky because it could all come to an end tomorrow. The safest way is to keep your money in a bank account where you know nobody else can mess with it."

It's often very difficult to get someone else to see a goal in the same light as you if they don't already share your values and principles, and in all honesty the effort to bring them around just isn't worth it.

Much better to simply keep that energy for yourself so that you can stay in the best shape possible to execute your plan and maximise your own chances of success. Because at the end of the day the goal is yours and nobody else's.

Money can be a contentious subject even among close family members, so unless it's someone that you're working together with, i.e. two partners creating a life together, don't bother sharing it.

Everybody has their own life to live in financial terms and their values and beliefs may differ to yours. So it's unlikely that your cousin, close friends or even your parents will understand when you explain why you're choosing to live in a smaller house, or continue renting, or make investments into an index fund.

As time passes and as you stick to your plan, the fruits of your labour will become visible without you needing to say anything. So stay patient, and stay private.

Don't just focus on the goal, focus on habits instead

Personally I believe this second "don't do" is responsible for the majority of failed attempts by people who try to set new goals for themselves.

"I want to lose 24lb of weight this year."

"I want to save £20,000 this year."

"I want to learn French this year."

All of these are great goals but there's just one problem: It takes time to achieve them.

And the problem with needing time to hit your goal is that every time you check to see if you've made it yet the answer is probably going to be "no".

Each time you look at the weighing scale you'll see that you haven't lost 24lb of weight yet; each time you check your accounts you'll see that the balance hasn't reached £20,000 yet; and each time you think about your French fluency you'll feel as though you can't hold a conversation.

This is also why the goal of financial independence can become so difficult, despite the actions required to achieve it being relatively straightforward. Every time we go to check we remind ourselves that we haven't arrived at the destination yet.

Being fixated on the goal also causes us to overlook the progress, because ultimately the end result is what we really want and is the "measure of success or failure". Saving £10,000 isn't considered a success, because the goal was £20,000.

Talk about demoralising.

A good method to avoid this trap is to stop focusing on the goal itself and to introduce new habits to your life that are inherently linked to the goal instead. That way, you can focus on the habit and you know that as long as you keep it up, the goal itself will see progress.

Here are some example habits that could help your goal of saving £20,000:

Eat home-cooked meals for 10 meals each week, and keep portion sizes reasonable.

Pay myself first each month by putting money into savings and investments.

If I am under budget at the end of each week I will put the difference into savings and investments.

None of these habits are explicitly about saving a certain amount of money, but they are finance related and you know that if you successfully follow them then you will make progress on your goal.

By eating home-cooked meals you know you're not over spending money on take out food or eating out in restaurants, and by keeping portion sizes reasonable you can maintain a sensible groceries budget; plus there'll be health benefits.

By paying yourself first each month you are guaranteeing that some portion of your income goes towards savings and investments. This means wealth building for your future comes to the forefront as opposed to being an aside, which is often the case for most people.

And by developing a habit to save any unused budget regularly you know - without checking - that it will help you make more progress towards any savings goal quicker than originally planned.

Shifting your focus to habits will make you feel much more in control overall because you can easily gauge if you are following the habits or not, and make the appropriate adjustment where necessary.

When you look at a goal and see that you haven't hit your £20,000 savings target yet, there isn't really that much you can do besides keep going - but the problem is you'll feel like you've been working hard and without a measure of success to show for it (Remember what I said about saving £10,000 out of £20,000).

In contrast, if you didn't eat as many home-cooked meals as you intended, you know you can do something to get yourself back into the habit the following week. And if you manage to do that, you will have a measure of success that can get you re-motivated. But notice how saving money isn't the focus here - it's just an effect of you maintaining the habit since cooking at home is cheaper than eating out.

So while it's important to set a goal to establish your overall direction initially, it's just as important, maybe even more so, to establish the right habits that will keep you moving towards that goal over time and keep you motivated to stay on track in the long run.

Don't set too many goals

Save more money, do more exercise, network with more people, learn a language, learn an instrument, read more books, start a side hustle, do more charity, the list goes on.

Setting new personal goals sounds and feels good, and whenever you sit down to think about what you want to do it's easy to let your imagination run off.

You fantasise about yourself painting a beautiful impressionist portrait in an art class with new friends who are full of praise for your work; and they themselves are probably beautiful too.

You envisage yourself travelling through the hidden walkways of a rural French town, speaking the local dialect to residents as they greet you. The weather happens to be perfect and you're dressed like a model.

Or you're famous for the blog you started, with tens of thousands of regular readers every month. The blog layout is flawless and the writing is a work of creative genius. You're making enough from the blog and it's now your main source of income.

Am I the only one who let's my own thoughts loose like this or....?

Anyways, guess what - it's probably not possible to become a talented artist who can speak French, has time to travel to rural French towns, and grow a blog in addition to "normal life" within the space of a year.

All of these things take a lot of time and commitment to make considerable progress and you only have so much energy to offer at any one time; especially if you're not financially independent and need to maintain a job.

The very same can be said for your financial goals.

Be it paying down debt, setting up an emergency fund, building up an investment portfolio, getting on the property ladder, building a new income source, or whatever it is you are thinking of doing:

Just focus on one!

Obviously if you're already experienced with goal setting and - more importantly - have been successful you can try to pursue more than one, but this is where you start and no matter how good you think you are, never try to pursue too many goals at the same time.

When it comes to your financial goals you also need to take into account your other non-financial goals, and understand what will be competing for your energy. If you're trying to learn how to bake amazing pastries, play the piano, rock climbing and pottery while trying to start a side hustle for additional income then it's unlikely you'll succeed in more than one of those, if any.

What will likely happen is you'll naturally gravitate to the one goal where you see the most progress, and that is the one where you'll continue your efforts while the others will be abandoned over time.

Even for financial goals that are quite "passive" such as investing a portion of your income every month, you need to account for some of the new habits that you might introduce into your lifestyle. New habits take time to internalise and will require energy just like anything else.

Look through all the goals you want to achieve and prioritise them - don't be afraid to cut some altogether so that they don't continue to distract you from what's really important. Once you've made your shortlist - and I mean really short - dedicate your whole focus to them without looking at the other goals that you've set aside.

Lower priority goals can always be revisited in the future after you've completed the current set you have decided to focus on, and your successes in the ones you've chosen will often serve as a great boost in self-confidence.

The key is to not become too eager to attain the end result, and to understand that this is a journey that takes time to develop. Just like how financial independence isn't something you achieve in a short amount of time, and that the best thing is to enjoy the process itself.

To Conclude

I'd share the goals I have decided upon for the year but then I'd be breaking my own rules, and I know how that would likely end based on past experience.

So instead, here were the goals that I set for 2020 instead. I've successfully completed these so I think I should be alright in sharing them, but I guess I'll let you know in the future if this was a bad idea.

Some of the goals I set in 2020 and the habits to help me achieve them.
Some of the goals I set in 2020 and the habits to help me achieve them.

Now that I have developed the habits that helped me achieved the goals, I can choose to take them further and try to achieve even more in 2021. Or, I can try to see if there are any new habits for me to form that will enable me to grow both financially and as an individual.

Time will tell if these are successful but so far, so good!

Whatever your own goals might be, good luck with achieving them and hopefully my humble advice can help increase your chances - even if it's just a little!

Secret 4th tip - Don't open the oven doors when making your Yorkshire puddings. Trust the process!
Secret 4th tip - Don't open the oven doors when making your Yorkshire puddings. Trust the process!


Don't wait for some magical number before you start "living". Life is full of surprises and you'll never be able to plan it perfectly. If you're doing sensible things with your money you'll eventually reach your goal. So start living now. The longer you wait, the less time you'll have. Money can be made, but time cannot. You are the barrier to the life you want to live, not a 4% safe withdrawal rate.

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