Another year, another set of promises? We tell ourselves we’ll save more, spend less, and tackle that heap of debt, but by February, the gym is empty, and so are our savings accounts. Why? Because vague goals and willpower alone aren’t enough.
Financial success doesn’t come from grand gestures; it’s built on small, sticky habits which stack up over time. So, let’s cut through the noise and get you a plan - one that works for real life and is sticky.
Before you race into the new year with bold plans, pause to reflect on 2024. Take an honest look to Reflect, Review, and Reset.
Did you stick to your budget? How much did you save or overspend? What were your biggest wins and setbacks? Sit down with your bank statements and examine the evidence. That’s where acceptance comes from and some of the disturbing facts will trigger real sustainable actions. Understanding where your money went last year helps you direct it better this year.
Make a will and update it. Simply put, if you don’t decide in advance, the government will decide for you. Your call.
Set SMART goals (because “Save More” isn’t enough). If you’ve ever muttered “I’ll save more this year” only to achieve nothing, you’re not alone. Vague goals are like setting off on a road trip with no destination. The message to your subconscious with a non-SMART goal is that it’s a dream not a reality. It will reject it. So, make them with that old adage of SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
For example: Save £3,000 for a holiday by December 2025 by putting £250 aside monthly.” “Pay off £1,500 in credit card debt within 10 months by paying £150 a month.”
Action Step: Break big goals into smaller milestones. Saving £3,000? That’s £10 a day or £70 a week - manageable and motivating.
SMART goals turn dreams into actionable steps. When you hit small targets, you build confidence, belief and momentum.
Build (or Rebuild) your emergency fund because life doesn’t care about your budget. A flat tyre, broken boiler, or sudden job loss can throw your finances into chaos if you’re unprepared.
Start with a realistic emergency goal - enough to handle most surprises without reaching for a credit card. If that feels daunting, remember, saving £20 a week adds up to £1,040 in a year. Automate it with a standing order into a separate account.
This gives you peace of mind. Knowing you can handle a curveball means you’ll sleep better at night.
Create a budget which reflects your life. A budget isn’t punishment; it’s a plan for what matters to you. Use the old 50/30/20 rule to simplify it: 50% for needs (rent, food, bills), 30% for wants (dining out, TV etc), 20% for savings or debt repayment. Use budgeting apps like Hyperjar, Starling Bank, Monzo or EMMA to budget plan. Adjust for real priorities, like saving for a big trip or paying off that lingering credit card.
Without a budget, money slips fritters through your fingers. A plan gives you control which builds self-esteem and more control.
Tackle debt with a strategy as it affects you mentally. Debt drains your future to pay for the past.
Avalanche method: Pay off high-interest debt first to save money in the long run. Snowball method: Pay off the smallest debts first for quick wins and motivation.
Example: Paying just £50 extra a month on a £1,000 credit card at 20% APR saves £150 in interest and clears the debt 10 months faster.
Automate your resolutions because the best way to stick to your goals is to take yourself out of the equation. Automate savings with a standing order on payday. Set up direct debits for debt repayments and bills.
Balance discipline with joy as financial success doesn’t mean giving up on fun. Allocate a “fun money” pot in your budget for guilt-free spending on experiences or hobbies.
When that money’s gone, it’s gone, but you’ll have enjoyed it without sabotaging your goals.
Small steps, big wins. Winning in anything is simply ending today better than yesterday, every day. The key to financial resolutions isn’t perfection; it’s progress.
It’s about small habits which stick.
- Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. If you have a financial question, call 028 6863 2692 or email info@wwfp.net
