Since it’s already April, I thought it might be the perfect time to talk about and review our New Year’s resolutions. If you set them, how are you doing? Still sticking with it or has your enthusiasm waned? I ask because I think we may be overlooking something that makes resolutions very difficult to keep.

Set Goals

While I don’t start off the year vowing against certain behaviors, I do set goals for myself. Goals and resolutions are indeed the same thing but just phrased differently. A goal carries a positive connotation and has embedded within itself, a sense of purpose and the seed of promise. That’s how I prefer to think about shaping my future.

This mindset touches on something that I think trips up many investors. Like New Year’s resolutions, we frame our past financial behavior as doing something wrong or vowing never to do that again, eg. did you resolve to never sell low again after the 2008 GFC. Who likes admitting that they made a mistake?

Instead, when we talk in terms of setting goals, something happens. It becomes more about the possibility of something good happening as opposed to the negative of a past mistake.

Attitude does matter

When we talk about behaving and making better financial decisions, attitude matters. By setting goals that imply something good, we are changing the tone from one of blame to one of possibility. For example, instead of resolving to never sell low again you could set a goal to build a low-cost, diversified Investment Plan? The goal deals with the mistake and gives you a sense of purpose and the seed of promise while the resolution implies you did something stupid.

If you’re struggling with your resolutions, it’s not too late to make the switch. Set a goal or two for 2016 and see what happens.