What was your New Year’s Resolution in 2018?

Maybe it was to get to the gym more often or to eat more salads. Or perhaps you told yourself you’d put down your phone more often and read more books.

A lot of people make financial resolutions, but they crash and burn by February.

Jean Chatzky*, the host of “Her Money” podcast and the Financial Editor at the Today show, teaches us how to make better promises to ourselves and make New Year’s resolutions without dropping the ball.

The following are excerpts from Chatzky’s recent conversation with Stash editorial director Lindsay Goldwert, edited for clarity.

1. Rethink “resolutions.”

“Resolutions are fraught with difficulty because it is so hard to keep them. Research shows many many people end up abandoning their resolutions by mid-February. And so whatever type of resolution you’re going to make… it’s important to not set the bar so high that you are going to fail, and then beat yourself up about it.”

2. To stick to your resolutions, look at the pros and cons.

“If people can get themselves to a point where they see more pros than cons to changing the particular habit, then the likelihood that they’re going to succeed goes way up. If you’re thinking, ‘I want to save more money this year,’ the pro to that is I’ll feel more financially secure. The con is that you’re not going to be able to do things that you’re used to doing because you’re not going to have as much money to spend.

You have to get yourself to a place where you can see the upside more than the downside. And I actually like going really old school, and writing it down on a legal pad to weigh your arguments.”

3. Become a better goal-setter.

“Goals should be specific. They should be tangible, and they should have a time limit.

Why do you want to save more money—are you saving for something specific? Are we talking about a down payment for a house or a car? Are we talking about a vacation or retirement? Whatever your goal is, you should try to attach a number [dollar-figure] to it.”

4. Break bigger goals down into smaller, easier achievements.

“Let’s say you want to go on a trip and you know it’s going to cost $2,000. You want to take that trip six months from now. You’ve got a lot of information that you need to benchmark your way to reaching that goal.

Take the six months and divide that into the $2,000…and you figure you need to save, say, $400 per month in order to reach your goal. And that’s a little less than $100 a week.”

5. If paying down debt is your goal, a little extra can make a big difference.

“Making additional payments, or paying a little extra [on top of the minimum amount due] every single month—whether it’s a credit card or a student loan—can make a huge amount of difference in the time it takes to get you out of debt.

A mortgage is a really good example of this. If you make one extra payment each year on a 30-year fixed-rate loan, it cuts the term of that mortgage down to about 24 years. So it saves you six years of interest just by making one extra payment each year.”

6. The first step toward reaching your goals? Save more.

“Save—save more, and do it automatically. We are a society of chronic under-savers. But that’s not 100% our fault. The system has changed around us over the last couple of decades to the point where we are much more responsible for our financial futures than any generation that came before us. We have no choice but to save a lot of money for our future, and the very best way to do that is to set it on autopilot.”

7. Try to save at least 15% of your income—but take baby steps.

“If you’ve been listening to the financial experts on the planet, like me, you know we like to say you got to save 15% [of your income]. And there’s a reason for that. If you save 15% of your earning consistently over the course of your career, you should have enough to retire on.

The problem is if you are starting at zero and you try to get yourself to save 15%, it’s [similar to] a crash diet, and you absolutely are going to implode. So, start at 2% and do that for a few months. And then bump it up, and bump it up again and bump it up when you get a raise, and bump it up when you have a birthday.

Just don’t try to go all in because it’s really, really hard for human beings to do that.”

8. Buddy up.

“If you’re trying to reach a financial goal, find an accountability buddy that you can tell what’s going on and ask them to hold your feet to the fire and offer to do the same for them. [For example], I’ve got a running partner. We started running together when our sons were about six months old, and they were both in baby joggers. Today, those six-month-olds are 24 years old.

We’ve been running together for that long, and some days I can’t make it, and some days she can’t make it. But we arrange to meet on a corner near the woods [regardless]. We’re going to show up.”

Don't have Stash yet?

Here's $5 to get you started on your investment journey.

Get my $5