Financial New Year’s resolutions are a common phenomenon this time of year—especially for anyone who overdid the holiday spending and who knows the new year is going to bring a new batch of credit card bills. Probably one of the most common financial resolutions is: “I’m going to make a budget and stick to it.”

I’ve not written much on New Year’s Resolutions over my 30-plus years of writing a personal finance column. Why? Because “white knuckling” any meaningful behavioral change is rarely successful. For example, I’ve gone to a gym daily for the past two decades. Every February the population swells from those who have purchased a gym membership and resolved to get in shape. By March, the attendance is usually back to normal.

The most important step of changing any problematic behavior, especially a financial one, is becoming willing to admit that changing the behavior is important, you are confident you can do it, and you are ready to change. Ebenezer Scrooge in A Christmas Carol ticked those boxes and underwent a financial and emotional transformation after he heeded a warning from the ghost of Jacob Marley and received the guidance from the three Spirits that followed.

Often, when we don’t yet believe that change is important or feel ready to change, we’re in some degree of denial. Looking clearly at the situation requires courage to look into the past, revisiting the events in our lives where the unconscious beliefs keeping us stuck were formed.

Scrooge resisted this step and tried his best to skip over it. We often do the same. Bringing objectivity and understanding to entrenched financial delusions isn’t easy. Many people want to focus instead on obtaining more information on how to save, invest, or spend wisely. We try to jump into the present and force ourselves to change without visiting the past.

Yet what we need most for transformation is emotional intelligence, which cannot be learned academically or developed by oneself. It must be learned emotionally, experientially, and in community. Just as Scrooge found a guide in the Spirit of Christmas Past, people wanting to gain the emotional intelligence needed to change their financial behaviors often requires the support of a guide. It’s a journey that’s hard to make alone.

Once we have taken that difficult but transformational journey into the past and learned what is behind our inability to make lasting financial changes, we are ready to become present and see reality with new clarity. This can be just as terrifying as looking at the past. Once we understand our flawed beliefs and become ready to change, we must face the need to reframe those beliefs  with accurate cognitive information. This is the place for learning about budgeting, debt reduction, investments, and other financial skills.

Scrooge’s guide, the Spirit of Christmas Present, helped him negotiate the present and obtain this knowledge. Our real-world guides may include accountants, attorneys, financial planners, financial therapists, and educational books and workshops. With their help, we can begin to create a future that is consciously and deliberately planned, rather than trying to scold and bully ourselves into changing.

The end product of Scrooge’s difficult journey with the three Spirits was a transformed person, full of joy, generosity, and spirit. He experienced this transformation because he had the courage and conviction to start the process.

This New Year, you could once again resolve to “stick to a budget.” Or instead, you might begin your own financial transformation more gently, by allowing yourself to become curious about the events of the past that make such resolutions so hard to keep.



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