How to make realistic financial new year’s resolutions

New Year’s resolutions are easy to make but hard to maintain. Studies show that by February, 80% of New Year’s resolutions are abandoned. If you don’t fall into this statistic, it’s important to create a list of realistic New Year’s resolutions. Here, Moneyfarm unpacks some ways to make sure you can stick to them for 2023.

1. Create a detailed plan: It’s important to create realistic financial goals for the year that you can achieve. To make things simpler, break down large goals into smaller goals. Creating smaller milestones will make achieving the bigger goals more realistic and the act of ticking off each achievement should give you the encouragement you need to carry on. If you find making a financial plan for the year too intimidating consult a qualified financial advisor early in the New Year to help you with it.
2. Separate your money into various pots: Do this for each financial goal. That way you won’t be tempted to spend the money on something else before you can achieve your ambitions. Create a specific account for each financial goal and label them accordingly. This can easily be done through Moneyfarm. You can even choose a specific risk profile for each pot. As I said, labelling is important. For example: you can call one pot ‘credit card’ or ‘holiday savings’ if you want to pay off your credit card or save for a holiday. Studies show that it’s harder to take money out of something that’s been set aside and labelled for a specific purpose.
3. Automate as much as possible: Dealing with finances can be a bugbear for most. You can take the hassle out of manually shuffling money around by using direct debits so that money is taken out automatically and allocated to a specific account. Investing with Moneyfarm through our app is simple, fast and can be automated. If your circumstances change your profile can be adjusted online, in app or by speaking to your dedicated investment consultant.
4. Give yourself a deadline: This may sound like a simple thing, but goals are more likely to be achieved if you set a specific date. So instead of saying ‘I’d like to pay my credit card off in 2023’ rather say ‘I’d like to pay my credit card off by 1 June 2023’. Put the date in your diary and create a realistic plan on how to achieve this.
5. Create an emergency pot: Good plans can often be derailed by the unexpected. One way to ensure that your New Year’s resolutions don’t get derailed is to make sure you have emergency savings to fall back on. Many advisors recommend saving between three- and six-months’ cash in an emergency fund. This could provide a financial lifeline if you, for example, get made redundant, or if your car breaks down or a major appliance in the home needs repairing. This money can then be used for those emergencies, and it also gives you the ability to stay on track with your financial goals.
6. Share your ambitions: One final way to keep on track with your goals is to share it with trusted friends and family. Studies show that you’re more likely to attain a goal if you have made a commitment with someone. Keeping up with New Year’s resolutions can be hard, but if you have people cheering you on it could make the process easier.

Remember, if you need help with your New Year’s financial goals you can always contact Moneyfarm by calling us or applying through our website or app.