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So, You Gave Up On Your New Year's Resolution. Now What?

If you fell off the New Year's resolution bandwagon sometime around February 15, but still genuinely want to make a change, a recent study by TD Bank found that using visualization to accomplish your goals could be a game changer.
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Teenager counting savings
Teenager counting savings

For many, New Year's resolutions are made on January 1 only to be discarded by President's Day. This can lead to a vicious cycle for the one in four Americans who, according to Nielsen, have made commitments to improve their personal finances in past years.

If you fell off the New Year's resolution bandwagon sometime around February 15, but still genuinely want to make a change, a recent study by TD Bank found that using visualization to accomplish your goals could be a game changer. TD found that 67 percent of Americans felt that visualizing their New Year's resolutions would improve their odds of success.

To find out more about how visualizing goals can be applied to personal finance, I spoke with Dr. Barbara Nusbaum, an expert in the psychology of money.

Ryan: What is visualization and how exactly does it work?

Dr. Nusbaum: In its most basic practice, visualization is picturing your own, self-defined success in a specific scenario. TD Bank found that the many Americans (86 percent) use visualization to achieve certain goals. For example, if they were training to run a marathon, respondents' personal visualization routines included things like imagining yourself passing the finish line and picturing yourself at each mile marker. Individuals add pictures or written plans to inspire them while training -- they post images of famous athletes or a training regimen on their bathroom mirror, or pictures of themselves accomplishing training goals.

Although research shows that many Americans are familiar with visualization techniques, and use them in their daily lives, the TD Bank study found that just 23 percent have used visualization to help them save or budget money. With emotions influencing 80 percent of financial decision-making and planning, using photos, written plans and other images to inspire and motivate can play a valuable role in achieving success.

Ryan: When thinking about using visualization for financial resolutions and other personal financial goals, how should people consider approaching it?

Dr. Nusbaum: It's important when making financial resolutions to make goals specific. "Improve my finances" is far too vague to be effective. Ask yourself, "What specifically do I want to achieve? What problem do I want to solve?" For example, you may want to reduce your credit card debt or pay off your student loans faster. Is there an expensive item you want or need to purchase? Is there a trip you've been wanting to take, but just can't figure out how to afford? Write down your specific financial goals and determine what you will need to do on a weekly, monthly or yearly basis to achieve them.

Ryan: How can people improve their chances for success?

Dr. Nusbaum: Visualization routines can be simple and effective. It can be as easy as finding a photo or other image that represents your goal. For example, if you have decided that 2016 is the year you will finally take that trip you've been putting off, pin a postcard of your desired destination where you will see it regularly, either virtually (like on your Pinterest board) or "in real life." If paying down your student debt is at the top of your agenda, display your college diploma somewhere prominent as a reminder. Or make a visual of a vertical thermometer with the total loan amount at the top. Each time you make a payment, color in that amount, so you can see your progress. The point is to be reminded visually of your goal, and to increase your emotional connection to it. This increases your motivation and progress.

Ryan: What do you recommend people do to stay motivated from day to day?

Dr. Nusbaum: Our individual success with financial goals is directly connected with charting our progress. You can use a Google document, Excel spreadsheet or one of many smartphone applications to track where you are against your goals. Remember to celebrate when you reach milestones; this is important to further empower and motivate you to keep going.

Ryan: Are there any mistakes people tend to make as they attempt to accomplish financial goals?

Dr. Nusbaum: Two things. I would encourage people to focus on future goals, but don't lose track of the present by going into deprivation mode. Incorporate the experiences you enjoy and can afford along the way. For example, find and post pictures of a play, movie or sports event you are excited about and plan to go. This can prevent you from fixating so much on the future that you forget to enjoy the present. Second, for visualization to be effective, you need to keep it going, work it into your routine. You can't do it once and expect it to influence your behavior and thoughts. Visualize on a daily or weekly basis, or whatever time interval works for you, to keep you motivated.

Overall picturing ourselves successfully taking steps toward and reaching our goals improves our confidence and increases the likelihood of reaching financial goals. Interestingly, visualization also increases satisfaction in the present, which goes a long way toward supporting the daily decision-making we need to achieve our goals and improve our happiness.

Ryan: Thanks, Dr. Nusbaum, for taking the time to discuss your experience with visualization.

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