Develop Better Money Habits

How are your New Year’s resolutions holding up? There’s a reason why so many New Year’s resolutions have failed by February. Truth be told, resolutions always seem judgmental to me. Many are built on guilt and shame about having done something “wrong” that got us to a place we don’t want to be. We form a resolution meant to “fix” us or the issue. The fact is, we have it all backwards: Resolutions should come at the end of the process, not the beginning. Instead, I propose using a list of questions to create a new paradigm about money.

How are questions different from a New Year’s resolution? A financial resolution is usually an external result you seek, such as “I want to pay off my debt,” or “I want to save more toward retirement.” The thing is, a resolution doesn’t have any power unless you understand how it relates to your thinking about the status quo. If your motivation comes from guilt or negative emotions, the motivation only lasts until you find something else to feel more guilty about. This is why so many resolutions fail.

Here are questions that my clients have found helpful as we kick off a new year:

  • What worked for you and what did you love about the past year?
  • What didn’t work and what frustrated you this past year?
  • What do you see as recurring themes in your life, either with money, people, or otherwise?
  • Are you ready to let go of past disappointments and forgive people who have hurt you?
  • What is one short-term goal you have related to your key frustrations?
  • What would you like to see or feel change in the new year?

A huge part of changing your dynamic around money (or anything, really) is letting go of the past and forgiving yourself — and others — for not being perfect.

We can’t beat ourselves up for not letting go sooner; we let go when we are ready. Once you’re ready to step away from your old ways of doing and thinking, your decisions to move forward are energized with stronger motivations.

A New Money Paradigm
To attain a better financial state, you need to define the behaviors that contribute to your financial health. As you start identifying them, ask yourself, “Are these behaviors that I can live with for the next few years?” If they aren’t, then they won’t stick.

A new money paradigm should start with the understanding that building wealth is an ongoing process. When you surround yourself with the conditions you need to support a new paradigm, choices and habits come more easily. You won’t be perfect 100 percent of the time (and who is?), but if you view everything as a trend, then incremental improvement counts. There is no self-judgment involved.

You can’t build a new, lasting paradigm on a foundation of shame, resentment, and regret. It only works with love, acceptance, and compassion. My guess is that most people could use more of these things in their lives. You can start by giving them to yourself.

One thing that is totally in line with this philosophy is my book, Personal Finance That Doesn’t Suck. You should check it out and see if this is a resource that can help you get ahead of your money in 2016!

Mindy Crary is a member of the DailyWorth Connect program. Read more about the program here.


Join the Discussion