2023-12-30 21:03:27
Bloomberg Opinion — If you’re thinking regarding setting a New Year’s resolution, you’re in good company. Surveys suggest that regarding a third of Americans set one or more goals for the new year. The problem is that only 1 in 10 can meet them.
So how do you make a resolution that sticks? The first step is to apply a basic principle of economics: you should only do things when the benefits outweigh the costs. This may seem obvious, so the trick is the systematic thinking that ensures you follow this obvious advice. That means breaking down larger, more general goals into smaller, more specific ones. Instead of resolving to “exercise more,” for example, ask yourself how much it would benefit you to spend another 15 minutes a week exercising.
The answer will depend on the time you already spend exercising, what you would do with those 15 minutes if you didn’t spend them exercising, and many other benefits and costs that are unique to you.
The trick ( once more borrowing a term from economics) is to evaluate marginal benefits and costs rather than total benefits and costs. Breaking goals into small pieces helps you see the effects of an incremental (or marginal) change. If the benefits are high and the costs are low, go for it! Then consider adding another 15 minutes a week, and so on.
Even if what you think you want is a big, radical change, concrete goals are easier to achieve. “Exercise at least 15 minutes three times a week” may not sound ambitious, but it’s a smarter goal than “exercise more.”
Economists look incrementally and iteratively for another reason: Costs tend to increase, and benefits decrease, as you do more of something. By slowing down and analyzing the benefits and costs of each small change, you will be able to better identify which goals would be truly beneficial and which might be good in theory but bad in practice for your life.
And what does it mean to be “bad in practice”? Objectives whose benefits are less than their costs. The goal of a New Year’s resolution is to improve your life. Furthermore, goals whose benefits barely exceed the costs can be especially difficult to meet.
To help you measure the costs, consider what you would do with your money, time or energy instead. This is called opportunity cost, and it is the most important cost of anything we do. Everything has an opportunity cost, and identifying exactly what is the next best use of your time, energy, or money is the key to figuring out whether any decision will make you better off.
So if you’re thinking regarding doing 15 more minutes of exercise a week, focus on what you’ll have to cut back on to do it. Sleep? The job? Watch TV? Time with friends or family? Will there be other time costs, such as traveling to the gym, turning 15 minutes of exercise into a 30-minute commitment? The less you value the time you give up, the lower your costs will be. Opportunity costs are also why economists look for ways to minimize time costs by combining activities: going on a hike with friends, for example, or listening to an audiobook while on the treadmill, or having walking meetings. . These cost-reducing combinations can make it easier to meet an objective.
There may also be out-of-pocket financial expenses associated with your goal, such as a gym subscription or new sports equipment. The same idea of considering the next best use of your resources works. What would you do with that money? Identifying exactly what you have to give up is the way to determine the costs of any goal.
It is essential to keep in mind that only you can know how much you value both the goal and the sacrifices necessary to achieve it. The old meme regarding how your coffee habit explains why you can’t afford a house was offensive not only because it trivialized the issue of housing affordability, but because it was judging the preferences of a generation. I think good coffee is delicious and worth paying for. Only you can decide how much it is worth to you.
So when you set your resolutions this year, focus on your personal costs and benefits, and make a resolution that can actually make you better. I predict that if you follow this advice, you will find yourself among the 10% of Americans who actually keep their New Year’s resolutions.
This note does not necessarily reflect the opinion of the editorial board or of Bloomberg LP and its owners.
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