Make This Financial Resolution Before ‘Spend Less’ or ‘Save More’


A new year brings new financial resolutions, and most of us come up with the same vague goals to “spend less” or “save more.” And sure, those are admirable goals. But before try cutting expenses or boosting savings, it’s important to take a step back and make another financial resolution first: to define your relationship with money. It sounds simple, but stay with me here—this resolution is necessary to making all your other ones stick.

Define your money mindset

Understanding what drives your financial behaviors—whether it’s security, status, freedom, guilt, etc.—is key to making changes last for more than the first week of January. As I previously covered, we all have a money story—and it’s never as simple as “I’m bad with money.” If you don’t address the root causes, you’ll struggle to sustain new habits.

Defining your money mindset also highlights conflicts and preferences. You may value both saving and spending on travel, or want to reduce debt while also enjoying lifestyle perks. Defining your inner conflicts and priorities allows you to set aligned goals. Defining your money mindset also helps build your financial self-awareness, as many of us have emotional relationships with money stemming from childhood or societal pressures. Increased awareness of your own money story enables you to separate feelings from smart money management. You can also connect your finances to your personal values to help find motivation during difficult times. Focusing only on numeric goals may work short-term, but if they lack a deeper meaning, you’re more likely to run out of steam.

How to define your money mindset

Here are some concrete steps you should take to define your money mindset:

  • Track your spending to uncover habits, beliefs, and where your money goes

  • Candidly discuss your feelings about money with a trusted friend, partner, or mentor

  • Journal about your emotions and attitudes related to money

  • Review major money memories and experiences in your life

  • Identify times you’ve made values-based money decisions

  • Consider how you’d spend money if you suddenly had lots more or less of it

The new year offers a fresh start for new financial habits, but real change takes self-reflection. Before simply trying to spend less or save more this year, you’ll be glad if you first examine your relationship with money. You’ll gain powerful insight to drive purposeful, positive changes that align with what matters most to you, and that will lead to more meaningful and lasting change in your finances.

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