Consider breaking down goals into manageable tasks and assessing incremental changes while also evaluating the opportunity cost of each resolution.
If you’re crafting New Year’s resolutions (or have already done so as 2024 began), you’re not alone. Research indicates that around a third of Americans set one or more goals for the New Year. However, only about one in ten manage to stay committed to them.
So, how can you create a resolution that sticks?
The initial step involves applying a fundamental principle of economics: Engage in activities only when the benefits outweigh the costs. Despite its apparent simplicity, the real key lies in systematic thinking, which ensures the implementation of this obvious advice. This means breaking down broader and more general objectives into smaller, more tangible ones. Instead of simply resolving to “exercise more,” for instance, consider the benefits of adding just an extra 15 minutes of exercise per week.
The value of this extra time spent on exercise depends on your current exercise routine, how you might utilize those 15 minutes if not spent on exercise, and a multitude of other unique benefits and costs.
The concept, borrowing from economics, is to assess marginal benefits and costs, as opposed to total benefits and costs. Dividing goals into smaller increments allows you to comprehend the impact of making incremental changes. If the benefits are substantial and the costs are minimal, then it’s worth making that resolution! You can then contemplate incorporating an additional 15 minutes into your weekly schedule, and so forth.
Even if you believe you want to make a significant, sweeping change, specific and measurable goals are more achievable. “Exercise for at least 15 minutes three times a week” may not sound overly ambitious, but it is a more strategic goal than “exercise more.”
Economists adopt an incremental and iterative approach for another reason: Costs typically increase and benefits decrease as you engage in more of something. By slowing down and evaluating the benefits and costs of each small change, you can better ascertain which goals would genuinely be advantageous and which might seem good in theory but impractical in your life.
What exactly does it entail to be “bad in practice”?
When it comes to New Year’s resolutions, it is crucial to assess the practical implications of each goal. Goals that yield minimal benefits compared to their costs may not be worth pursuing. The primary purpose of setting a New Year’s resolution is to enhance your life. Therefore, it is essential to evaluate whether the benefits of a specific goal outweigh the associated costs.
In economics, this assessment is known as the opportunity cost, representing the value of the next-best alternative forgone when a decision is made. By considering what you would do with your money, time, or energy instead, you can gauge the opportunity cost of a particular resolution. Recognizing the next-best use of your resources is fundamental in determining whether a decision will truly contribute to your well-being.
For instance, if you are contemplating adding 15 minutes of exercise to your weekly routine, it is essential to identify what activities you would need to sacrifice to accommodate this change. Would it encroach on your sleep, work, leisure time, or time spent with friends and family? Additionally, consider any supplementary time costs, such as commuting to a gym, that may arise, potentially doubling the time commitment. Minimizing time costs by combining activities, such as socializing during a hike, engaging in multitasking during exercise, or participating in virtual meetings while walking, can help mitigate the overall costs and enhance adherence to your goal.
Furthermore, certain resolutions may entail out-of-pocket financial expenses, such as a gym membership or purchasing sports equipment. It is important to weigh these costs against the value of the alternatives. Reflect on what else you could do with the money and identify the specific sacrifices required to achieve your resolution. Understanding the full scope of financial implications is crucial in pinpointing the costs associated with each resolution.
Ultimately, the value of a resolution and the willingness to make necessary sacrifices are subjective. Only you can determine the true worth of your goals and the trade-offs involved. As you establish your resolutions for the year, place emphasis on evaluating the personal costs and benefits associated with each goal. By following this approach, you can increase the likelihood of realizing resolutions that genuinely enhance your well-being, thereby positioning yourself among the 10% who successfully uphold their New Year’s resolutions.
