Earn Rewards: Sign up now and earn a special reward after your first deposit. See offer details

Now available: New and improved Socially Responsible Investing portfolios. Learn more



Save, invest, retire

GET — On the App Store


Introducing Custom Model Portfolios. Learn more


Forget Your Resolution—Ask Yourself How You’ll Fail in 2020 Instead

Instead of setting a New Year’s resolution, try considering what you could do to destroy your resolution in order to help reveal potential pitfalls so you can safeguard against them.

Articles by sherrillstgermain
By Sherrill St. Germain Financial Columnist, Betterment Published Apr. 02, 2019 | Updated Dec. 20, 2019
Published Apr. 02, 2019 | Updated Dec. 20, 2019
5 min read
  • If you weren’t able to stay on track with your New Year’s resolution, you’re not alone. In fact, 80% of New Year’s resolutions made in January fail come February.

  • Try taking a different approach to achieving your resolutions by thinking about what it would take to achieve the opposite of your goal.

  • This method can help reveal stumbling blocks, misconceptions, and risks that could throw your plan off track and may safeguard against the pitfalls.

So you started the New Year with an ambitious resolution for your finances, but now, just a few months later, you find yourself off track. It’s okay. That’s more than normal. According to U.S. News and World Report, 80% of New Year’s resolutions fail by the second week of February.

Instead of setting a new resolution—or ending your commitment to yourself altogether—try a different approach. Try considering what you could do to destroy your financial health this year.

It’s exactly the opposite of what people typically ask themselves in January, but if you’re looking to hone your financial plan, it can pay to turn the traditional method of making New Year’s resolutions on its head.

Take a page from “Inversion Problem-Solving.”

James Clear, a proponent of the problem-solving technique known as inversion and author of Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones, suggests that there’s a lot to be learned about how to succeed by exploring what it would take to fail.

“Inversion is a powerful thinking tool because it puts a spotlight on errors and roadblocks that are not obvious at first glance,” says Clear.

Inversion has us ask what not to do, making it a complement to standard goal-setting techniques, which look at what to do. “Thinking forward and backward” can uncover more creative, robust strategies for getting from Point A to Point B.

It’s like playing reverse psychology on yourself.

Set up your financial plan to “fail.”

Let’s try an example to illustrate. Suppose you and your spouse are aiming to retire next year—that’s your big New Year’s resolution. According to your financial advisor’s projections, your resolution is doable, but only if you stick closely to the plan. What could you and your spouse do throughout this year to ensure that, come next year, you both will have failed spectacularly?

January Use your year-end bonus to jet off to the Caribbean for an all-inclusive vacation. On a whim, invest in a timeshare so you both can come back every year.

February Take advantage of Presidents’ Day sales to lease a sleek midlife crisis vehicle at the low low price of $650 a month for 5 years. Incur a $500 annual increase in your auto insurance.

March Celebrate the arrival of a precious grandbaby by opening a 529 plan and making the first of many planned $2,000 annual contributions to help fund college.

April Wait until April Fool’s Day to start the previous year’s tax prep. Get so caught up in the fire drill to finish on time that you miss out on funding IRAs.

May Do a cash-out refinance of your home to pay off the credit card debt from last year’s holiday shopping spree, repairs to a leaky roof, and dental work not covered by insurance.

June Cash out your spouse’s whole life insurance policy to fund the $10,000 launch of a side gig you’re sure will generate supplemental passive retirement income.

July Cosign a loan to help one of your grandchildren pay for his sixth year at college. Tap the emergency fund to front him $2,000 for incidental expenses.

August Quit both of your day jobs after the side gig lands its first client. And do it right before your third quarter bonus.

September Get stuck paying a jaw-dropping premium for health insurance that has a high deductible, doesn’t cover your costliest health concerns, and isn’t accepted by your favorite doctors.

October Get spooked by the usual October volatility in stock markets and panic sell all your investments on Halloween. Skip your appointment with your family financial advisor because you’re both too embarrassed to fess up.

November Discover over Thanksgiving dinner that Grandma has lost half her nest egg by falling victim to a  scam, and agree to help her cover expenses to the tune of $300 per month.

December Forget to contribute to your new Health Savings Accounts (HSA) because you’re busy trying to finish up a side gig project you hope will cover holiday expenses.

Now, revisit a more realistic scenario.

Okay, so this scenario may be a little over-the-top, but the truth is often stranger than fiction. Let’s revisit this faux year-long scenario to examine what mistakes were made that may prevent you from reaching your stated retirement goal. As a former financial advisor, here are eight problems I can point out.

  1. Your family’s spending seemed to be ad hoc, if not extravagant. You also experienced more than a few periodic or unanticipated expenses like new cars, roof repair, scams, and the high cost of your grandson’s tuition.
  2. The cash-out refinance reinforced concerns about your budgeting. It also extended repayment on your mortgage at a time you want to be reducing fixed expenses. With rates up and interest no longer deductible, it’s a costlier solution than it used to be.
  3. The abrupt transition to self-employment brought uncertainty to cash inflows. Your emergency savings may help at first, but taking too much, too soon from your retirement accounts could impact the longevity of your funds.
  4. You added new risks by co-signing your grandson’s loan and reducing health and life insurance coverage.
  5. You liquidated your investments during a market decline, locking in losses.
  6. Your seat-of-the-pants approach to taxes resulted in multiple missed opportunities, including IRA and HSA contributions, as well as a 529 plan for your new grandchild’s education.
  7. You also incurred taxable income (stock and life insurance gains, self-employment profit) you could have delayed until next year’s anticipated lower tax bracket.
  8. You did all this without consulting your financial advisor.

Happy New Year, indeed. There are probably a few other actions you and your spouse could have taken to further derail your retirement plan, but this was certainly an impressive effort. To be fair, you were both also blindsided by personal finance woes not of your own making. But don’t underestimate just how strange life can be. Unforeseen challenges, extra expenses—this is the stuff of real life.

The Upside of Downers

In any case, the point of this exercise is not to indict the fictional self-saboteur versions of you and your spouse. Rather, we mean to help you think ahead about the pitfalls that may be keeping you from your New Year’s resolution and explore how you can make a more serious attempt at safeguarding against them.

As always, avoiding pitfalls will be easier said than done, and there’s no 100% guarantee of success. But you get the idea. Armed with new insights into where you could fail like the ones in this extreme example, you can better position yourself to succeed.

The future's waiting

This article is part of
Original content by Betterment

How would you like to get started?

Manage spending with Checking

Checking with a Visa® debit card for your daily spending.

Save cash and earn interest

Grow your cash savings for general use for upcoming expenses.

Invest for a long-term goal

Build wealth or plan for your next big purchase.

Invest for retirement

Set up traditional, Roth, or SEP IRAs to save for the golden years.

See details and disclosure for Betterment's articles and FAQs.