Why New Year’s Money Resolutions Won’t Work – And What Will

Why new year’s money resolutions won’t work – and what will

New year, NEW resolutions – this is the year we’re definitely going to make things happen, right?

But there’s a problem...

These resolutions – which yes, sounds nice and smart and so motivational – actually set us up to fail.

Why? Because, too often, they’re an emotional impulse-checklist that lacks a concrete plan for action. And action is the ONLY thing that matters in making a successful life change.

Not to mention, New Year’s resolutions are so timing dependent. If we fail to meet this abstract timeline, have we then lost our chance for the rest of the year?

Starting our resolution late or screwing up early, within the first few days or weeks, feels like a license to put it off until next year. Surely then positive lasting change will finally happen. Ya… right.

We’re in control all year long

Sure, resolutions might have been made with the best of intentions: A checklist to be the better version of ourselves...to create a better life – who doesn’t want that for themselves?

Here’s the thing. We can make these changes ANYTIME we need or want to – not just at the beginning of the year.

Remember: we’re in charge all year long.

It’s about the effort

Having goals are nice but the consistent actions we take towards those goals count much more.

Having a list of goals may be helpful. But even better is having a list of actionable steps to reach those goals.

It’s about doing our best everyday. Being consistent. And forming habits through sheer force of will.

What’s more? NOW is almost always the right time to start.

Strike while the iron is hot, when you’re full of motivation, and before laziness and procrastination have the chance to sink in.

Start forming that habit TODAY and be ready for momentary setbacks and failures along the way. They will come, so have a plan to overcome them now, before they hit. Think through what you’ll do when you’re tired, frustrated with progress, or all out of willpower.

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Change is incremental

As much as we ALL crave for a miracle cure or a magic pill…

In real life? It’s about discipline and commitment.

And as boring as that sounds, there’s no cheap or easy shortcut. Not for free, nor for sale.

Keep making those small easy changes today that add up to big meaningful changes down the road.

Building better money habits all year long

So you’ve got some specific goals you want to achieve (like paying off that car loan for example), you’ve written down your action steps to achieve those goals, and…

...you’re ready to commit to make this year a turning point when it comes to your finances.

Here are 7 questions to get you thinking about some wallet-friendly habits to get started – and stick to – all year long:

1. Do you have a calendar reminder to pay your bills on time every month?

You know it, I know it…

It’s easy to forget.

We’re all so busy juggling too many things at once. Before you know it, a whole month has passed. Did we remember to pay our bills or even think about what we’ve spent?

Creating a recurring (and yes, pesky) calendar reminder urging us to pay our bills or else … (see list of negative consequences below) should scare our brain a little to get paying our outstanding bills and review our finances asap.

Sometimes, calendar reminders aren't enough though…

We need to stimulate our brain with a dose of fear. Here are some things that could happen if you miss paying your bills on time:

  • Negative impact on your credit score, which in turn could have a…
  • Negative impact when you apply for credit (like applying for a new credit card with better rewards, a mortgage, a car loan, etc)
  • Negative impact when looking for condo or rental
  • Negative impact on your job opportunities (more and more employers include credit scores in their background check)
  • Negative impact on your savings (or vacation fund) from all those late fees and interest charges.
  • [insert your fear right here]

2. How well do you know your number each month?

Math has never been my strongest (nor my favourite) subject. But that’s besides the point.

Because with money calculators and tools so widely and readily accessible – I’ve got no excuse.

At the very minimum, we should ALL know these four numbers by heart every month:

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Now, the plan is NOT to create an accounting ledger where every cent is accounted for. (That’s self-torture...unless you’re a super detailed person who actually enjoys it?)

If this is something completely foreign to you, no worries. Here’s an action plan that should take about 2 - 3 hours of initial time investment and the first step only takes 5 minutes:

Your Numbers

Time Investment

Action Plan

Net income

5 minutes

  • Grab your last two pay-stubs and highlight your take-home pay.
  • Record it in your notebook (or excel or even your phone)
  • Hold on to this pay-stub because we’ll need it for later...

Fixed expenses

1 - 1.5 hours

  • Log in your online banking and review the list of transactions you made over the past 30 days.
  • First of all, your take home pay should match what you recorded earlier – they do right? (If so, first win.)
  • Then look at everything taken out of your bank account and make a note what they’re for. (You can download your transactions into a spreadsheet or budgeting software if that’s easier.)
  • Classify each item as a fixed expense that you know stays at a flat rate month after month, otherwise...

Discretionary expenses

30 minutes - 1 hour

  • That item is most likely a discretionary expense.
  • Any cash withdrawals usually fit this category as well.
  • Again record them in your notebook (or excel or your phone).
  • Then use your favourite calculator and add up all the numbers.
  • Now you should have your total expenses that you can further breakdown between fixed and discretionary.

Savings and investment

25 minutes

  • Back to your pay-stub. If you’re contributing in your employer’s GRRSP, then bonus. You’ve got a built-in, automatic, investment plan in place…
  • The question becomes, are you contributing at the max rate? Let’s say, your employer is willing to match your investment up to 4% of your gross salary and you’re contributing at 1% – then there’s plenty of room to grow your investment quicker.
  • After taking into account all the expenses, is there any money left you can put away for savings or long-term investing?
  • Write down your findings.

3. How long has it been since you reviewed your paid subscriptions?

You can build a snowball of momentum by investing a couple of hours into knowing your numbers.

One amazing side effect is it forces you to notice all your paid subscription at once.

Take this opportunity to make note of which subscriptions still give you a tremendous amount of enjoyment and benefit…

If they don’t, you know what to do. Cut them mercilessly. Or find a cheaper alternative.

4. Are you saving automatically every month?

If you aren’t automatically saving a flat amount or percentage of your take home pay every month, then you need to get on that right away.

No matter how small the amount, developing the habit now is of great importance.

If you’ve got a GRRSP, then the answer here is an automatic yes.

Here are two follow-up questions:

Three more money habits

Three other wallet-friendly habits if you’re looking for ideas...

5. Are you prepping your lunch to bring to work most days if not every day?

Don’t get me wrong, I enjoy eating out. I love good food that I don’t have to cook. But I’d rather pay for a $20 dollar dish at a local restaurant made fresh from scratch – than spend $8 to $10 every day on fast food.

Eight dollars of buying lunch everyday is $40, double my budget of $20 for a delicious meal. (To have or not to have a drink, that’s another topic altogether.)

Sure, prepping your lunch meals takes initial thought and planning.

But when you make meal planning into a day-to-day routine, it becomes second nature.

Also, once you have a stable of weekly meal plans, you can just keep reusing them.

6. Are taking taking advantage of legit free money?

Legit free money isn’t too good to be true. It’s out there...

We’ve compiled a list of 14 ways you can claim yours right here.

7. Have looked into cutting the cord?

Canadian cord cutters have been growing in number.

If you’re at the fence, read our free internet tv guide which will walk you through step-by-step.

Beyond this month

Checklists only come alive with action and effort.

There is no such thing as perfect timing. Things are never and can never be perfect.

Remember: resolutions aren’t exclusive to the new year.

We’re in control ALL year long. So find your resolve and get started today. It’s never too late.

Disclosure: Some links in this article may be affiliate links. We're letting you know because it's the right thing to do. Here’s a more detailed disclosure on how HTS makes money.

Editorial Disclaimer: The content here reflects the author's opinion alone, and is not endorsed or sponsored by a bank, credit card issuer, rewards program or other entity.

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Money Beagle's picture

Set goals, not resolutions, is my first piece of advice. I also think that goals should be tied to something that already exists, especially if you really insist upon doing them around the New Year. Trying to start something brand new that you've never done before and reach a really lofty goal is just too much, and too many people quit when it first gets overwhelming. Keeping it simple and rooted in something you already know will help you succeed.

Happy 2018.

January 09, 2018 @ 2:00 pm
Stephen Weyman
Stephen Weyman's picture

Exactly, and if you're serious about it start right away

January 09, 2018 @ 3:30 pm
En's picture

It's interesting that you mentioned the importance of knowing the monthly "four numbers by heart". I actually didn't pay that much attention until my husband and I sat down this week to crunch some numbers. Super helpful to know these when you want to budget! Thanks for the article!

January 11, 2018 @ 12:32 pm

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