MONEY

Stick to your money goals…or pay up

This month, I’m highlighting a few extra tips that got cut out of a column in the January/February issue of MONEY on “Making Resolutions Stick.”

You’ve got some great financial plans for 2011, but if you’re feeling a little energy dip about now, don’t fret.

Money goals often fall prey to inaction, experts say, because they typically require time-consuming research or complex steps. (Think of what goes into choosing a 529 plan, or the lifestyle changes you have to make when paying back debt.)

To overcome that pesky inertia, says Yale professor Ian Ayres, author of Carrots and Sticks, you need external incentives to help you stay the course. And few things help people hold up their end of a bargain more than knowing they could lose a chunk of cash.

To that end, Ayres and two colleagues have created Stickk.com, a website that encourages you to set goals — and agree to pay a financial penalty if you fail.

The system is ingenious, and scary, because it forces you to put some teeth into those promises you make. Here’s how it works:

  • After signing up for a free Stickk.com account, you state your goal.
  • You set the time frame, when the goal starts, and how often you’ll report on your progress.
  • You agree to pay a monetary penalty if you fail, or if your referee (someone you designate to monitor your progress) finds you’ve dropped the ball.

Even worse — or better, depending on your perspective — you can direct your penalty to be paid to a charity, a friend, an enemy or a cause you despise (either the Brady Center to Prevent Gun Violence or the National Rifle Association, for example, depending on which side of the gun control/Second Amendment debate you favor).

In my case, I’m looking at the Stickk website now, trying to make myself enter my credit card information so that, if I fail to stay on track with the final push for my almost-there emergency fund, a $25-per-week penalty can be sent to a certain ex-president’s official library.

There’s only one flaw with this website: Who is going to make me stick to my decision to make myself Stickk to my New Year’s resolution?

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