An economist’s guide to keeping your New Year resolutions

Got some New Year resolutions? Wondering how you’re going to keep them? Think you could benefit from some behavioural economics and psychology tips (who doesn’t?!).

1) Make your resolution public. If you care about what people think of you, you probably won’t want them to see you fail. So, tell your friends and family what you’re aiming to do. See psychology expert Robert Cialdini’s work on public commitments for more details, or take a look at his book, “Influence” for a summary. 

Gym2) Make it costly to fail. If it will cost you money to fail, you may be persuaded to try harder. But beware: paying up-front for, say, a gym membership might not work as well as you think. Economists Stefano DellaVigna and Ulrike Malmendier looked at gym members at US health clubs and found that people overestimated how much they would use the gym, and were therefore paying for expensive gym contracts that they weren’t using. Instead, try making a commitment to paying out a certain amount contingent on not achieving your chosen goal. For example, make a bet with a friend that you’ll achieve your goal (unless your resolution is to gamble less in 2012). Or commit to giving a certain amount of money to charity if you fail on your goal.  Websites like StickK allow you to make these types of commitments.

3) Remember it gets easier once you get into the habit. Behavioural economics experts like Daniel Kahneman, Richard Thaler and Cass Sunstein all use “System 1” or the “automatic system” to describe the type of human thought that happens automatically or instinctively – for example, quickly withdrawing your hand from a hot surface. If you can manage to get into a routine, gradually your preferred behaviour will turn into a habit – it starts to become a bit more like a System 1 process. For example: the habit of getting off one station early and walking home from work. After a while of concerted effort, you’ll (hopefully) find yourself doing it without thinking much about it.

Good luck!

Got any other tips? Post them below.

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