Power Tip #1: Harness the Power of Loss Aversion.

Loss aversion is the principle that we humans are often motivated (or discouraged) by the threat of negative outcomes. If positive motivation isn’t working, try negative motivation. Poor financial choices don’t always have an immediate negative impact, but you can create one. For example, you could bet on your ability to follow through with the necessary steps to reach a financial goal. Losing money — especially to something you dislike or someone you rival, can be powerfully motivating.

Power Tip #2: Bring in the Power of Accountability.

Accountability to ourselves isn’t as motivating as accountability to others — whether it’s a friend, sibling or member of a group you belong to. If you don’t have a personal network, use fitness and financial apps to draw on a more public social network. It’s amazing how much motivation can spring from “competing” with strangers trying to achieve the same goals!

Power Tip #3: Take Willpower Out of the Equation.

We often think willpower (or motivation) is integral to achieving financial goals. If we fail, we must not have enough of it. Some willpower is necessary for taking the first step and gaining momentum toward our goals, but its tendency to fluctuate (much like our emotions), means we can’t count on it to drive us to completion.

With other disciplines, such as healthy eating or exercising, willpower is more of a constant battle until new habits are formed. With finances, it’s easier to eliminate willpower because you can draw on the help of technology — through automation.

Automatic savings and payments aren’t exactly set-it-and-forget-it categories, because you should still check in on your finances – but they only require one dose of willpower to get them going. Try it. You’ll be surprised how much more you can achieve by just having an automated schedule.

Power Tip #4: Focus on the Power of One Goal.

Another reason we often fail to achieve our financial goals is that they’re goals (plural), versus a goal (singular). Pick the biggest area of opportunity, the easiest one to achieve, or the one you feel most excited about — whichever strategy works best for you. Having a singular focus for the year is less stressful and daunting while allowing you to dedicate more of your resources and attention to perfecting it, rather than just barely hitting the mark.

There are different kinds of power, and they play into the success or failure of our financial goals in surprising ways.

Need help setting your financial goals? Make an appointment at your nearest branch location, email marketingbd@firstffcu.com, or call 732-312-1500.

Article Source: Jessica Sommerfield for Moneyning.com

If you often struggle with setting financial goals and making them stick throughout the year, try these six tips.

1. Use the SMART principle.

The acronym SMART is a good way to remember an effective strategy for setting your fiscal finance goals. Make them specific, measurable, attainable, relevant, and time-specific. In other words, instead of deluding yourself that you’ll completely overhaul years of poor money management, start to tackle it in bite-size portions. Keeping goals specific also makes them seem more real and tangible than the undefined “improving my financial fitness.”

2. Incorporate the new practice into your routine.

Science shows we are creatures of habit. Once something is part of our routine, even if it’s an unpleasant task, we don’t seem to mind it as much. Getting to that point requires making a deliberate effort to incorporate new financial habits into your routine. To make this step easier, set up reminders on your smartphone calendar for specific times and dates you’ll set aside to address various aspects of your finances, whether it’s daily, weekly, or monthly.

3. Keep doing it – repetition leads to habit.

The more frequently you perform a new financial task as part of your routine, the sooner it becomes a habit – something that doesn’t require any willpower. That’s the trick.

4. Don’t judge yourself for failures – expect them.

Half the battle of following through with new goals of any kind is how you handle failure. If we were to ask the people who succeed at sticking to their goals what their secret was, you can almost guarantee it involves expecting and accounting for failure. Instead of hoping you won’t fail, plan to fail. That may seem pessimistic, but it’s more realistic than thinking you’ll be perfect! After all, we’re just human. It’s what you do after you fall that makes the difference between permanent failure at financial goals and long-term success.

5. Give yourself some wiggle room to account for slacking off.

You should create some wiggle room into your fiscal fitness improvement plans. Round up or down, schedule a “slack” day or two, and don’t make plans that are too rigid or that depend too heavily on your own consistency. This will take some of the pressure off and allow you to move forward even if you are taking a step back every once in a while.

6. Hold yourself accountable.

Even as you expect to fail and leave yourself some room to slack off, don’t go to the opposite extreme of approaching your fiscal fitness goals without purposefulness. One of the best ways to hold yourself accountable is to make your intentions public and ask others to support you. There’s power in numbers. Just as it’s easier to commit to a 5 a.m. workout if you have someone by your side, it’s easier to change the numbers that determine your financial fitness when you use the buddy system.

Instead of refusing to make financial goals because you’ll inevitably fail, use the expectation of failure, along with these tips, to move beyond that cycle this year. Gradually and deliberately improve your financial well-being and turn that ship around toward financial success.

Article Source: Jessica Sommerfield for MoneyNing.com