Learning Center

04 JAN

Why Do Financial New Year’s Resolutions Fail

Making better financial decisions is one of the most common New Year’s resolutions in the world. It usually sits in the number three spot, right below weight loss and personal development. This is especially true today, when households and businesses are striving harder than ever to operate more efficiently and eliminate financial waste. In fact, financial resolutions might eventually occupy the number two or even number one spot.

Like most New Year’s resolutions, people generally have a hard time following through in terms of managing their money. It’s not that they don’t really want to make improvements, or don’t understand the benefits of doing so. But life has a way of throwing “curve balls” our way. We all know that running a household or business—or both—is full of unexpected developments. Rarely does an entire month pass without some sort of expense that wasn’t planned for—let alone an entire year.

Indeed, this is why so many financial New Year’s resolutions are unsuccessful. Either they set the bar too high and try to achieve too much in too short a time, or they fail to allow for the unexpected.

Many resolutions fail because they were never clear enough. Making a vague commitment to save more money will rarely produce results. Why? Because it doesn’t deal in specifics. Financial resolutions are definitely more successful when clear goals and targets are put in place.

Even if a financial resolution is clearly defined, it will often fail because it was not effectively implemented and tracked. Tracking is a very important piece of the puzzle when it comes to keeping those money related resolutions. There is no point in setting clear goals (whether those goals are related to saving, investing, earning, spending, or getting a better result on your tax returns) if you aren’t going to track your progress day day-in and day-out. Using some type of financial software can make this part easier.

A secret early in the year

Many people don’t realize this, but tax season is perfectly placed to help us better manage our finances. Since taxes are due in April, most people start thinking about filing shortly after the new year. Those who choose to work with certified tax professionals have a distinct advantage when it comes to making and keeping better financial resolutions. Tax pros are highly adept at recognizing strengths and weaknesses in the finances of households and businesses. By asking a professional the right questions, it’s possible to get a clearer handle on what decisions and day-to-day actions will best serve you in the year ahead.

It’s important to recognize, however, that not all tax services are created equal. Some companies are more skilled and experienced than others. Some were trained in prestigious academic programs, while others were not. If you’re interested in taking advantage of tax season to further your financial resolutions for the year ahead, make sure you find truly reputable and trustworthy specialist to handle your accounts and give you the best advice.