The Top Reasons New Year’s Resolutions Fail &How to Achieve Your 2023 Goals

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The Top Reasons New Year's Resolutions Fail &How to Achieve Your 2023 Goals

Each year, around January, millions of people all over the world sit down to create their New Year’s resolutions. According to a research study conducted in America by an organization called Inside Out Mastery, 38.5 percent of adult Americans set out their New Year’s resolutions at the start of every year. However, by the end of the year, only nine percent of those people will have achieved their New Year’s resolutions.

Have you set your own New Year’s resolutions in the past? Did you achieve them? Why do people often fail to achieve their New Year’s resolutions?

What is a New Year’s resolution? I like to define a New Year’s resolution as a resolve made by someone to achieve a specific goal or target within a particular year, in this case, 2023. People are currently setting goals or targets that they would like to achieve in the coming year, such as saving more money, becoming healthier through exercise, reading more books, spending more time with their families, building a house, and many more. Setting New Year’s resolutions is an excellent idea, especially at the start of the year. The beginning of the year gives us a fresh start and a new beginning, which puts us in the mood to sit down and plan for the year, setting big goals we want to achieve.

However, why do people often fail to attain their New Year’s resolutions? In my experience, I think there are two major reasons why people find it challenging to continue working toward their New Year’s resolutions.

1. The first one is setting New Year’s resolutions without linking them to specific life goals. To increase your chances of achieving your New Year’s resolutions, you should not set them on your own. You need to link your New Year’s resolutions to your life goals. I would like to introduce you to a new way of looking at your New Year’s resolutions.

First off, don’t set New Year’s resolutions without looking at your long-term goals. Even before you set a Year’s resolution, think about your longer-term goals for your life and for your family. These goals could range from five years to 10 years. What goals do you have within this timeframe? Examples include: 

  • I would like to build a house by 2026 
  • I would like to take my child to Wits University in South Africa by 2024, or 
  • I would like to increase my retirement fund by 2030 because I’ll be retiring in 2035 or maybe 2032.

 Think about the bigger long-term goals that you have for your life. That is what should set you up to create New Year’s resolutions or targets.

Having set these bigger life goals, you now need to break them down into annual targets. This is where the New Year’s resolutions actually come from. You resolve to say, “This year, for me to take my child to Wits University or buy that brand new car, this is the small step that I need to take today.” Break down your bigger goals into annual actions or targets that will eventually get you to that bigger goal. You cannot build a house within a year if you don’t have the resources. For you to build the capacity and the resources to build a house in 2026, you need to be saving a little bit every year. That will give you enough money to build your dream house in 2026.

Think of New Year’s resolutions as targets that will get you to achieve your bigger goal. For you to do this, I would like to introduce you to thinking of your New Year’s resolutions in the form of SMART goalsSMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. By setting SMART goals, you can ensure that your New Year’s resolutions are linked to your long-term goals and will help you achieve them.

Thinking of your New Year’s resolutions in form of financial reports.

I would like you to look at your New Year’s resolutions by considering four boxes. So, you need to draw a box and then draw a line in the middle as well as another one horizontally. Then look at the left side, on the left side at the top, you are going to have your income targets, and at the bottom, you’re going to have your expense targets. On the right side, you’re going to have your assets targets, and below, you’re going to have your liability targets.

So, think of your New Year’s resolutions using these four boxes. These four boxes are going to make your New Year’s resolutions smart, that is specific, measurable, attainable, realistic, and time-bound. 

 The left side.

 The left side looks at your income. So, for me to achieve my big goals, these big goals that I want to achieve in 2026, in 2030, and so forth, how much money do I need to make this year in terms of income for me to serve towards achieving my bigger goals?

So, you are thinking about your revenue or your income and go deeper when you’re thinking about your revenue. So, you’ll have set a target to say, for me to build a house in 2026, this year: 

  • I will need to save at least 200,000 or 50,000 towards building my house in 2023. 
  • And then towards my child’s school fees, I will need to save maybe about 40,000. 
  • Towards buying a brand new car, I will need to save about 100,000. 

So, when you are thinking of your income targets, don’t just think about the target, also think about the amount so it becomes measurable.

Saving money for your resolutions

So, how much do I need to save this year for me to achieve my overall goal? So, of course, you’ve got 12 months in a year, but think about how you’re going to be saving that money across the month. So, you will have your overall income target, so add up the amount for all your goals and put that in their income box. That is your target for income. As you think about the income, also don’t forget about the income that you’re going to need for you to run your life, basically to live the day-to-day life income that you need to pay your rent, to pay for your food, for your utilities, and all these other general household management expenses.

So, think about income also for household needs. So, you’ll have ticked your income targets. 

Now go to your expenses. How am I going to spend this income? This is where your goals become very essential, so you need to.

Remember, you need to look at fixed expenses, which are things you need to run your household. Rent for your house and school fees for your child in a private school are fixed expenses. You should also include expenses related to your overall goals. For example, if you want to buy a new car in 2024, how much of your income do you need to save? Include that as an expense, and contribute the specified amount each month or year towards buying the car. Also, add expenses towards building your house, increasing your retirement fund, and taking your child to university.

Once you have accounted for your fixed expenses and expenses related to your goals, you can identify your variable expenses. These are expenses that are not essential to your livelihood or the attainment of your life goals. Categorize them as entertainment or other non-essential expenses, and separate them from your fixed expenses and goal-related expenses. The difference between your income and these expenses should result in a surplus that you can use for your variable expenses.

The right side

Now, let’s move to the right side of your New Year’s resolutions or targets, where you will find your assets at the top and your abilities at the bottom. You need to consider your asset box carefully because the targets or resolutions you set for your assets will determine how much income flows through to your income box. Your asset goals might include increasing your investment in government bonds, among others.

You see, for you to get revenue, let’s say under your income, part of your income source is revenue from government bonds. For you to get that revenue, you need to invest in the Government Bond, and that is an asset that you have. You can also consider your job as an asset. Other assets might include investments that you’ve made in property and even in your business. So, when you’re thinking about assets, you are thinking about things that add value or that will give you a return that will result in extra income, which is going to go towards the attainment of your life goals, as well as the achievement of your New Year’s resolutions.

The second reason why New Year’s resolutions fail is that people set them, but you don’t actually set resources to achieve those New Year’s resolutions. For example, you might say, “I want to become healthier, I want to increase my exercise routines, and I will need to join a gym membership.” But then you don’t have the cash to pay for that gym membership. So, for you to achieve this goal of becoming more healthy by joining a gym membership, you will need to know how much it costs to go to the gym. Therefore, you would have set aside resources for your gym membership. So, even as you think about New Year’s resolutions, think about the resources, and the resources are going to come from the assets. So, build your asset, and increase your asset values for you to get the income that you need to attend to your life goals, as well as your New Year’s resolutions.

The final box, which is at the bottom right corner, is the liabilities. The liabilities are simply credit debt that finances mostly your assets. One New Year’s resolution that you can set with r your liabilities or your debt is to improve or reduce your debt by increasing your debt repayment. The longer it takes you to repay a debt, the more expensive it becomes. Therefore, set a target to reduce your debt as much as possible. For you to build wealth, you cannot build wealth by incurring huge interest repayments because a loan extends beyond a specific period. The longer you have a debt, the more expensive it becomes. So, consider setting a New Year’s resolution that helps you to reduce the amount of debt or loans that you have. Alternatively, or inversely, you might also consider increasing your loans if you think that your loans are going to act as leverage to invest in the assets that are then going to help you make extra income.

 However, I am very wary when it comes to incurring or getting a loan in Zambia because of our interest rates and really, its interest rates as well as the nature of the loans that are available on the market. First of all, our interest rates are ridiculous. If you’re trying to get a loan in Zambia, you won’t be able to get one for less than 29%. On top of that, it’s a variable interest rate, which means that even if you do get a loan for 29%, you don’t know how much it will cost you in the next three years. It might even be 35% because maybe economic factors are not so good at the moment, and the Bank of Zambia has revised its base rate upwards. 

I’ve heard of advertisements regarding mortgages that are going for 16%. However, before deciding to get that loan, you need to ask yourself if it’s a fixed interest rate or a variable interest rate. If it’s a variable interest rate, don’t be surprised when, a year or two from now, it jumps to 29%, because the financial institution has the right to revise variable interest rates depending on the economic conditions. So, be wary when it comes to getting a loan as leverage to increase your investment in an asset.

This is how I need you to think about your New Year’s resolutions. Think about them through these four windows or boxes. If you do, you’ll notice that these four boxes represent the financial statements that accountants actually prepare. What I’m telling you is to prepare your personal financial statements. The left side represents your income statement, and the right side represents your balance sheet. It determines your net worth, so every year, your net worth should be going up. Your expenses, which you can find on the left side of your income and expense statement (budget), will help you budget for your income. This will allow you to work within your budget

The third reason why people fail to attend their New Year’s resolutions is that they are not committed to achieving their New Year’s resolutions. They get bored; they’re not disciplined. You might have a perfect system for setting goals, but if you are not committed, if you’re not disciplined to get out of bed and do your exercise routine, you will never attain your New Year’s resolutions. So, create these habits of commitment as well as discipline and know that at the end of the day, you are going to gain benefits by achieving your New Year’s resolutions.

Think about getting to December and reflecting back and seeing how you’ve achieved your New Year’s resolutions. You are going to be so proud of yourself. Not only that, imagine increasing your asset value as well as your income and achieving or getting a step closer to your overall life goals. That’s exciting, isn’t it?

Insight Partners Africa— aims to bring you actionable insights from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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