Three out of five North Americans have failed to meet their financial goals this past year, but less than one quarter (24%) are remedying the problem by adjusting their spending and saving habits.
An online poll of over 1,000 participants, conducted by authors Joseph Grenny and Loral Langemeier, reveals that the financial downturn is only part of the serious financial problems facing North Americans. Most people refused to adjust their spending habits during the recession and as a result, two-thirds are currently in financial trouble, and only 6% are on track to save enough for retirement.
Grenny, author of Change Anything, and Langemeier, author of Yes! Energy, found that people are finding it hard to kick bad spending and saving habits when they have no control over their willpower, and a poor understanding of the need to save and build resources for the future.
“The success of our goals hinges on our ability to summon the necessary self control or willpower,” says Grenny. “We’re powerless to change our financial habits until we recognize the influences that suck us into financial self-destruction and take control.”
While different factors affect each of your individual clients, a poor attitude in general can weigh heavily on their ability to change long-standing financial habits. Langemeier believes the last five years “have been tough and have left most people with no energy and dwindling motivation.”
The question remains: What is the successful minority doing differently?
The average person’s plan to gain control of his or her finances includes trying one or two behavior-change tactics, such as cutting up a credit card or unsubscribing from coupon mailers. Those who included four or more tactics in an effort to boost saving, however, were 53% more successful in attaining their personal financial goals.
Below are the top five behavioural changes that will help your client meet their short- and long-term financial goals.
1. Track and review past spending.
2. Learn what you don’t know. Learning new skills like budgeting, reducing expenses and replacement behaviour in order to save more.
3. Avoid groups and activities that cause you to spend more.
4. Reward yourself with inexpensive or free treats after achieving goals.
5. Cut up to 10% of current spending by reducing utility bills, cable channels, data plans and subscriptions.