Up Your Chances of Sticking to Resolutions

In the interest of transparency and accountability, I want to report on the uncharacteristic New Year’s resolution I made last year: I resolved to be a more generous tipper. Breaking a lifelong 15% habit was harder than I imagined, but I persevered, kept my resolve and plan to continue to do so this year.

Meanwhile, I found some helpful tips for the economic new year in the new issue of Money. A survey from Vital Research reported that a blown resolution ends up costing us about $1,000, based upon a 70% failure rate. You know, not saving enough or not saving in an IRA or not cutting unnecessary expenses, etc.

To combat this inattentiveness to your personal finance, Money suggests shoeboxes.com, a free app that makes it easy to store and categorize receipts. “Better than an actual shoebox.”

Required reading for all docs should be a visit to opscost.com where you can see what Medicare actually pays hospitals for dozens of common procedures. It is not possible for us not to be surprised, if not appalled.

Another recommendation is StickK.com, which has documented that pledging a sum of money to meet some announced goal/resolution of yours yields a 79% success rate, compared to 29% success for those who do not hold themselves accountable. And we know who we are.

Likewise, Dominican University researchers say that just sharing your goal or goals with someone else boosts your chances of success by 33%. Even keeping any kind of log on your own has been shown to make a big difference in one’s success rate. Stick with any new habit for three months, psychologists say, and you own it.

Financial planner Lauren Lindsay suggests a new ritual to manage the expense, if not curse, of impulse shopping. The suggestion is to impose a 24-hour “cooling off” period. If tomorrow finds you still jonesing for that purchase, well, at least you tried. I’ve found that going to get a snack, or even just walking around the block, does wonders for reestablishing common sense.

Last year I predicted that, like all cyclical economic phenomena, gold would take a dive and it did last year by 30%. It turns out that gold’s value is not actually linked to inflation as much as it is inversely proportional to the strength of the dollar. So as the economy strengthens, gold falls because it has no inherent value and it produces no gain. Gold’s valuation is entirely based on emotion and what you think the other guy might be willing to pay, based on your varying degrees of fear — the “Greater Fool” theory.

I will go out on a limb and say that it will fall again because we see the economy improving, albeit slowly and with faltering steps. Again, no one knows how far or fast or when, but I will hazard a guess that gold’s future bottom will settle around $600 because of steady demand from China and India, as they grow economically. It is still cultural and emotional, but there you are.