A year ends, and a new one begins, bringing hopes, dreams, and fresh starts.
For many, the transition between years is the perfect time for personal growth and goal setting in the form of New Year's resolutions.
However, sticking to resolutions can be challenging, and giving up is easy.
New Year's traditions not only are good for the economy but also encourage us to make resolutions that can also improve our lives.
When it comes to financial resolutions, If you treat them as SMART goals you’ll have an even better chance to enhance your long-term wealth through investing for the future and help you get better at saving money.
Why We Celebrate New Year's Eve
The last day of the year, December 31st, is celebrated as New Year's Eve.
It is a festive night where people come together to say goodbye to the old year and welcome the new year with hope and optimism for the future.
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New Year's Eve parties and celebrations date back centuries and are rooted in different winter solstice traditions from various cultures worldwide.
Today, people celebrate by attending parties, eating, drinking, making noise at midnight, and sharing the first kiss of the new year with loved ones.
How Much Do We Spend on New Year's Eve Celebrations?
New Year's Eve has become a significant event for food, beverage, and entertainment businesses.
According to recent industry reports, Americans spend over $9 billion a year celebrating the holiday. People spend an average of $65 each on New Year's Eve festivities like party supplies, decorations, and alcohol for gatherings at home.
Another popular choice is dining out - the average spend per person at a New Year's Eve dinner in a bar, restaurant, or ballroom is around $73.
This holiday is a money maker for many establishments that host large New Year's Eve parties and events.
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The Beginning of Something Good
As the celebrations wind down and the hangovers fade, many use the first days of the new year to commit to self-improvement goals known as New Year's resolutions.
According to research surveys, approximately 45% of Americans participate in this tradition.
Resolutions typically revolve around intentions to better ourselves through changes in habits, behaviors, attitudes, or lifestyles.
Health, relationships, career, education, and finances are common focus areas.
Benefits of Setting New Year's Resolutions
While resolutions are challenging to maintain, research shows they can be beneficial when appropriately approached.
Creating keys connects us to our deeper values and desires for personal growth. They motivate us to envision the type of person we want to become.
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Achieving resolutions, no matter how small, boosts confidence and willpower.
They also promote healthier routines that enhance well-being over the long run.
Making answers public or sharing goals with friends increases accountability, too.
Why Are Resolutions Important? Treat Them Like SMART Goals
To successfully achieve New Year's resolutions, it's essential to transform vague intentions into clear, actionable plans.
This is where the SMART goal framework provides a proven strategy.
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound.
Following this framework when setting resolutions makes goals much more likely to be attained. People are also less likely to lose motivation partway through.
Applying the correct principles helps align keys with personal values and link short-term targets to long-term aspirations.
Some of the Most Common New Year's Resolutions
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Below are some frequently reported resolutions according to surveys done each year, along with insights into potential costs and long-term benefits:
Health Resolutions:
- Lose weight/do more exercise: Although you can achieve this goal free of cost, many are willing to spend good money to get there, like gym subscriptions, expensive exercise machines, to name a few.
However, Being active improves well-being, that will save money from fewer medical bills in the long term.
- Eat a healthier diet: It is more expensive initially but prevents costly diseases and leads to long-term savings.
- Quit smoking: High upfront costs to quit but enormous healthcare savings over time from preventing smoking-related illnesses. On average, smokers spend $2,000 extra per year on tobacco.
Financial Resolutions:
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- Save more money each month: Automatic transfers make it effortless. Leads to wealth accumulation over decades through compound interest on investments.
One study showed families who saved just $20 more per week on average had over $25,000 more in their retirement accounts by age 67. - Create and follow a budget: Free budget templates are available online. Paying with cash only for discretionary spending eliminates credit card interest charges.
- Pay down debts: Saving 13% annually on interest through debt repayment. Credit score boosts access to lower borrowing costs later.
Other Common Resolutions:
- Spend more time with family/friends: Priceless! Strong relationships are vital for well-being.
- Learn a new hobby: Variable costs, but a mental break enhances focus and reduces stress. Potential future income source, too, through monetizing skills.
- Travel more: Investment in experiences boosts happiness more than possessions.
Research shows that the happiest retirees prioritized travel over luxury goods in their prime earning years. Memories last a lifetime.
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While pursuing goals requires a willingness to invest time, effort, and sometimes money upfront, research has shown that resolutions focused on health, relationships, and finances frequently realize cost savings or stimulate wealth generation in the long run.
Using a SMART goal framework explains the most excellent chance of success.
Committing to New Year's goals, even small steps leads to an improved quality of life and financial security over the decades ahead. Yes, you can!
High Cost Resolutions
A few resolutions tend to require significant outlay:
- Home renovations/repairs: Large upfront costs are variable by scope but add value to the property long-term as an appreciating asset. Maintains safety and comfort.
- Take dream vacation: Expensive, but research shows experiences boost happiness more than material goods. Memories are appreciated forever. Plan to save over multiple years if needed.
- Pursue higher education/career training: Tuition costs offset by lifetime higher earnings potential. Pays dividends through career milestones and retirement assets.
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Final Thoughts
Sticking to resolutions means continuously assessing progress, adjusting plans as needed, and celebrating accomplishments - big or small.
Remember, perfection is not the goal. Consistent effort makes each year better than the last, and better choices make each year improve.
Best of luck in the new year on your journey to grow in health, wealth, and happiness through goal-setting and implementing financial strategies!
