The Secret to Making Your Financial New Year’s Resolutions Stick – You!

By Pamela Yellen and Dean Rotbart

Perhaps this year, finally, you will get your financial house in order.  That means roping in spending, slashing debt, maximizing income and choosing investment and savings vehicles that actually deliver what they promise.


Even if you’ve fallen back on your New Year’s Resolutions, it’s not too late to get back on track. Learn how by watching this fascinating interview of Pamela Yellen on Good Day New Mexico

Even if you’ve fallen back on your New Year’s Resolutions, it’s not too late to get back on track. Learn how by watching this fascinating interview of Pamela Yellen on Good Day New Mexico

Hardest of all, it means sticking to your New Year’s resolutions beyond Valentine’s Day, past Mother’s Day and July 4th, all the way through Labor Day, Thanksgiving, and yes, New Year’s Day 2012.

Remember, past failures are no guarantee of future failures!  In fact, before they ever succeeded, research shows that most successful New Year’s goal-setters faltered for five consecutive years or even more.

You are far more likely to be successful if your resolve comes from within, instead of being imposed on you by outside forces.

This could be the year that you surprise everyone – perhaps most of all, yourself – by keeping and maintaining your New Year’s resolutions.

New Year's Resolutions

For the roughly 45% of us who determinedly set off on January 1st with a full head of steam, but run out of inspiration before February 14th, a subset of Americans – about one out of every five – do push ahead and do achieve their stated goals.

Whether the resolution is to lose weight, exercise more, quit smoking, drink less or spend less, for a small percentage of the population, New Year’s Day is the very trigger they require to set off on their final journey towards – or away from – a lifelong pattern of behavior that previously seemed unattainable.

What does it take to be one of the successful few?

What can you do this time around to increase your likelihood of remaining on track come New Year’s Day 2012, 2013… and well beyond?

7 Secrets to Get Your Financial House in Order – Permanently

  1. We all have it within us to modify our behavior
  2. Real, permanent change is usually driven by your own desire, rather than by the pressure others exert on you
  3. Have a heart-to-heart talk with yourself. Where are you right now… and where do you want to be?
  4. Enlist the support of one or more allies or a coach to encourage you and help keep you on track
  5. Consider using websites that give incentives – and disincentives – for sticking to or breaking your commitments (such as a
  6. Don’t wallow in self-blame when you fail – put aside your emotions and plot a logical pathway back
  7. Don’t set yourself up for failure by insisting on an all-or-nothing change. Learn from the past, realize where you made errors and build on them like stepping-stones

“People need to understand that there is a problem that is causing them more harm than good,” says M. Kathryn Seifert, Ph.D., a Maryland psychologist who operates three mental health clinics…

They are very capable of turning that around, even if they tried 100 times and it didn’t work.”

Too often, self-help books and magazine advice articles focus on the “how” of permanent change, rather than the “why.”  Recipes for financial makeovers abound, often repeating such well-worn pearls of wisdom as “a penny saved is a penny earned,” “compound interest is the most powerful force in the universe,” and “pay yourself first.”

But knowing “how” to turn your financial life around is vastly different than understanding “why” so many people try to get their accounts in order and so few succeed.

Smoking is a perfect illustration of the “how versus why” puzzle, since those who wish to kick the addiction have given rise to a mega-industry and health care specialty.

In their groundbreaking book, Changing for Good, psychologists James O. Prochaska, John C. Norcross and Carlo C. Diclemente logged at least 130 different techniques that smokers hoping to quit were utilizing in their effort to snuff out the habit.  As the authors discovered, it is not a lack of potent and effective quitting techniques that defeats so many smokers.

Rather, it is the internal thought processes that prevent (or enable) permanent, life-enhancing change – a discovery that has captured the focus of many leading academics, clinical psychologists, life coaches and authors.

Most of the understanding and advances in this field of psychology have come from scrutinizing those individuals who have been able to set a life-changing goal, meet it, and keep themselves from relapsing.

The good news…

Researchers have discovered, is that we all have it within us to modify our behavior and cross the “Resolution Finish Line, regardless of how ingrained our habits are. There is no type of individual, class, religious or ethnic group that is predisposed to failure – or to success.  Nor is luck a key component.

Those who are most successful at changing, according to Edward L. Deci and Richard Ryan, are those whose motivation to change comes from deep within.  Deci and Ryan, professors at the University of Rochester, are the originators of Self-Determination Theory (SDT), a 25-year-old model that has attracted a swelling global community of researchers and practitioners.

SDT differs from other theories of change in that it concerns itself not with the quantity of your willpower – plenty of strong-willed people can’t seem to overcome their unwanted traits – but with the quality of your motivation.

Edward L. Deci
Professor Edward L. Deci, PhD

In an exclusive interview, Professor Deci, author of the book Why We Do What We Do: Understanding Self-Motivation, explains that SDT distinguishes between “controlled” motivation – the kind that is more or less imposed on you, and “autonomous” motivation – which reflects your own natural aspirations.

Your boss may be squeezing you to increase your performance at work. Your doctor may be encouraging you to shed some pounds.  Your spouse may be pressuring you to spend more time with the children.  Your brokerage account statements may be flagging your dwindling retirement savings.  Your pastor or rabbi may be phoning to inquire as to your whereabouts.

You may want to please others and fundamentally agree with their arguments for why you should makes changes – i.e. controlled motivation.  But chances are you won’t succeed.

Says Professor Deci:

You are going to go through the motions and end up in the same place.”

Real and permanent change, the professor explains, is most efficient when driven by autonomous motivation – meaning the resolve you generate that is independent of outside pressures.

When we abandon our New Year’s resolution within weeks of toasting to Auld Lang Syne, our lack of persistence should serve as a flashing neon warning that the goal or goals we set were not – at least not yet – truly motivated by our own passions.

stressed out how why woman“In general, with controlled motivation, there is very poor persistence,” says Professor Deci.  By contrast, “if you make a New Year’s resolution autonomously, then you are really behind it with your full self.”

That is not to say, Professor Deci notes, that the initial spark of permanent change can’t be externally generated.  Quite often it is.

Unexpectedly losing your job or watching your retirement savings implode following a market swoon can be a terrific motivator for finally setting and remaining within a family budget.  Losing a tennis match to your neighbor – who is 15 years older than you – can get you to reconsider second helpings at dinner.  Narrowly avoiding a serious traffic accident may well prompt you to begin regularly attending religious services.

But the key word in all of this is you.  Y-O-U…


The choices we make and the actions we take to please others – no matter how noble our intentions – do not have the durability or the force of those steps we take and decisions we make because they fulfill an internally generated mandate.

No bill collector, financial advisor or pesky in-law can provide the sustainable motivation required to rewire your financial thinking.  Only you, when you set your mind and heart to the task, can successfully generate a turnabout of your fiscal direction.

Have you resolved to turn around your financial situation?

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Professor Deci says that economic hardship or job loss leads to a clear choice between looking at circumstances as taking place outside of our control or within it.

“There is stuff that happens in life – not always the things that we want to happen in life and we face challenges,” he acknowledges.  “We can engage [the events] in the way of being controlled – ‘I’m so angry, everybody is against me.  They are taking my money, they are taking my house, they are taking my car.’”

Or, Professor Deci says, those who face fiscal stress can view it as an opportunity to take charge of their lives – i.e. autonomous motivation.  “Another way to think is, okay, this really sucks what has happened to me.  It’s time for me to figure out what I can do under this really unpleasant set of circumstances that will allow me to go on in a way that is healthy and [still] satisfying.”

Where and how to begin…

Professor Deci recommends those who seek to change begin by having a heart-to-heart conversation with themselves.  “Sit yourself down in a chair and be ready to have an honest look at where you are at this moment” and where you, based on your own desire, want to be down the road, he advises.

“If you start out doing this autonomously, the consequences of it are hugely different than if you start out doing it in a controlled way,” he says.

Even when the path to success is steep and clogged by obstacles, the professor says those who slug forward of their own volition achieve a “much higher sense of well being, a much better sense of feeling good about yourself and what you are doing, and a general sense of vitality as you are living your life.”  Moreover, reversals along the route don’t lead to feelings of personal failure and worthlessness.That didn't work, what are you going to do next?

While the quality of your motivation is the key to success, there are actions you can take to reinforce your internal resolve.  Chief among these, many professionals agree, is enlisting the support of one or more allies to encourage you and point you back in the right direction should you begin to drift.

Dr. Seifert, the Maryland psychologist, says a ‘coach’ – whether he or she is a professional for hire, a friend or a religious leader – can help to reinforce your commitment.  “Some people need a coach to keep going, someone who can say, ‘that didn’t work, what are you going to do next?’”

Dr. Seifert’s clinics see about 2,000 distressed individuals a year, many of them struggling with financial crises.  For most people, she says, the right motivation coupled with persistence and the aid of a coach provides what they need to achieve their goals.

Seeking outside support – be it formal and professional or informal from a friend or family member – is so important that a variety of web-based services have cropped up to help sustain those trying to make lifestyle changes.

Key to financial futureJ.D. Sherrill, a 30-year-old graduate of Arizona State University who has battled to quit smoking and shed weight, is one of the founders of, a 4-month-old website designed to allow friends and family members to monitor the progress and provide incentives to GoalPay users who have committed to change.

Mr. Sherrill says the inspiration for GoalPay came from his own experience.  “The things that I kept to myself were easier to forget about and never actually follow through on,” he explains.

Steve Siebold, a popular author and speaker who coaches corporate sales forces on mental toughness and self-control, has interviewed hundreds of millionaires in an effort to deconstruct their secrets.

Siebold, author of How Rich People Think, insists that “anyone can do it” – that is, become wealthy.

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One of the key differences between those who are defeated by financial roadblocks and those who knock down barriers along their path is how they respond to disappointment.  Siebold estimates that 40% to 60% of today’s most successful investors, entrepreneurs and executives have failed multiple times.

Rather than wallowing in an emotional state of self-blame, Siebold observes that those who rebound the fastest and most successfully set aside emotional thinking and put their minds to the task of plotting a logical pathway back."The key to the whole effort is their belief system" he says. "They believe this is possible."

“The key to the whole effort is their belief system,” he says.  “They believe this is possible.”

Judith A. Belmont is a psychotherapist and author of the forthcoming, The Swiss Cheese Theory of Life, a book about “thriving in the face of life’s adversities, overcoming challenges, developing stress resilience, and making effective and long-lasting changes for a happier life.”

Don’t set yourself up for failure…

In a recent interview, Belmont notes, “there is no such thing as a perfect resolution,” describing most New Year’s goals as “a set up for failure” because they embrace an all-or-nothing attitude toward change.

Belmont cautions against perfectionism and advises patience and persistence.

patience persistence

“It doesn’t matter where you are on the journey, what matters is the direction you are going,” she says.  “Learn from the past, accept shortcomings, realize where you made errors and build on them like stepping stones.”

Tell us in the comments box below what you’ve found works and what doesn’t when it comes to changing habits and behavior…


  1. Wow, Pamela what an insightful article. This brings to mind a quote attributed to the great American pioneer, Henry Ford. “Whether you think you can, or you think you can’t–you’re right.” Everybody should take responsibility for his or her life and confidently declare that “The Buck Stops Here”. Merry Christmas!, and this is to sticking to our resolutions throughout 2011.

  2. I have a question. If you have enough cash value built up in your Policy would you pay off your home or keep the “cushion there for possible emergencies?? My mortgage is on a fixed 5.35% for 15 years.

    • I am not a licensed financial advisor and there are far too many variables for anyone to advise you on this question, without knowing more about your situation.

      I suggest you get a referral to a Bank On Yourself Authorized Advisor which you can do when you request a free Analysis (if you haven’t already done so).

  3. Pamela, this is an excellent and timely article. Belief is the key. One of my favorite quotes, which comes from Think and Grow Rich by Napoleon Hill, is “whatever the mind can conceive and BELIEVE it can achieve”. We all conceive constantly. Believing we can achieve is what causes us to take the actions necessary to make it happen. Thanks for the article and Happy New Year.

  4. Well done Pamela! Remaining on track is an ongoing challange. Perhaps I could offer more food for thought from an article I read from Roy H. Williams’ Monday Morning Memo: “Make a commitment. Fling yourself into it. Passion will make its debut soon after….When a commitment is fully settled in the heart, all concerns about time and money are erased; “It will take as long as it takes and it will cost what it costs. When the objective is clear and your commitment is absolute, schedules and budgets no longer apply. (December 20, 2010)

  5. Excellent article. Speaks clearly to the problems of sticking with any goals. Good book to supplement this article is “War on Art” by Steven Pressfield. You’ve got to know who the enemy is and how to defeat the enemy.

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