It’s that time of year when you might be thinking about a new year resolution that could improve your life in some way over the next 12 months.
But how often do you stick to your new year resolutions? Research reported by Forbes suggests that 80% of new year resolutions are ditched by the time February rolls around, so if you’ve traditionally struggled to keep to yours, you’re certainly not alone.
Instead of picking a new goal to pursue every January, it may be more beneficial to consistently work towards one or two long-term goals. Read on to learn more about how you could save more money and achieve bigger goals by doing this.
Your future self could be the key to successful saving
If saving more money is one of your resolutions, long-term thinking has been shown to be very beneficial in helping you achieve this goal. This is because, as demonstrated by scientific research, if you view your future self as very similar to your current self, you are more likely to take responsible actions to ensure your long-term financial stability.
The idea of the future self and current self being seen differently by different people dates back to the 18th century, when Joseph Butler wrote “If the self or person of today, and that of tomorrow, are not the same, but only like persons, the person of today is really no more interested in what will befall the person of tomorrow, than in what will befall any other person.”
The BBC reports that the idea was later championed and explored by researcher Hal Hershfield. In 2009, he found that people who feel a closer connection to their future self were more likely to delay gratification in order to receive a bigger financial reward than those who did not feel a connection with their future self.
Source: BBC
In 2018, he found that this phenomenon applied to a range of areas, not just financial wellbeing. It was also consistent in matters of health and fitness.
This suggests that by regularly thinking about your future self, you’re more likely to build a future that you love than by setting new short-term goals every January.
The importance of why
According to James Clear’s book Atomic Habits, having a very clear and compelling reason for wanting to make a change to your life is vital for achieving your goal. In fact, one of the key takeaways from the book directly relates to the abovementioned research:
“The most effective way to change your habits is to focus not on what you want to achieve, but who you want to become.”
Your reason for making changes to your habits is vital because habits are formed by a cycle of:
- Cue
- Craving
- Response
- Reward.
The reward must be compelling enough to encourage us to have the desired response to the cue and craving. This is especially true if the action required is difficult or uncomfortable.
By creating a few long-term goals for your future self, such as financial freedom, a certain date for retirement, or a particular lifestyle in retirement, you’ll have a very clear reason to commit to the incremental goals you set yourself in the meantime that will allow you to achieve that ultimate goal.
Work with your financial planner to set realistic and effective goals
Financial planning is all about visualising the life that you would like to have and working backwards from that to decide what action to take today.
Your financial planner doesn’t just help you grow your wealth, they help you do so intentionally so that you achieve the specific goals you have for yourself and your family. That might mean taking out the appropriate types of protection, deciding how best to access your pension to fund your retirement, or creating a plan for a phased retirement so that you can reduce how much you are working.
They can also help you to keep those goals in mind, hold you accountable for the part you will play in achieving them, and help you through any difficult periods.
Get in touch
If you’d like to speak to someone about creating a plan for achieving your long-term goals, we can help. Either contact your financial planner directly, email us at hello@ascentawealth.com or fill in our online contact form to organise a meeting and we’ll get in touch.
