We find ourselves in January again…we tell ourselves that it’s the year that we’re going to get fitter, take up a new hobby, find a new job and save more money.  In fact, according to YouGov,  “the single most common New Year’s resolution this year is to save more or spend less, with 21% of resolution-makers saying they intend to try and improve their finances in this way.”

But will resolution-makers reach their goals?  According to YouGov, one in three claim to have kept all of the resolutions they made in 2024 (33%).  That’s great for all those who managed it but for those of you who didn’t, not achieving goals can batter confidence levels and keep you on a monthly roundabout of financial worry and frustrations.

So, how do you break the cycle?

Here’s a few tips to help you break financial habits that are not serving you well:

  • Start talking about money.  It can be difficult at the beginning, you may not be used to doing it but find a trusted friend, or a financial coach, and just start…it will get easier the more you do it.
  • Face the figures.  It can be easier to bury your had in the sand and ignore your personal finances but, unless you take action, nothing will change.  So block out a couple of hours, grab a cuppa and face your finances.
  • Pull together a ‘spending plan’.  Once you’ve faced reality, start to think about the future and how you can plan expenditure with more intention.  Make sure that it’s realistic, there is no point in making a plan that you’re not committed to.  Use a template to help you plan, such as this monthly spending plan template.
  • Automate your money with standing orders, direct debits and using different pots or bank accounts for different types of spending.   Having all income going into and then staying into one account usually makes personal finances much more difficult than they need to be.
  • Take some time to consider the money-related stories and experiences that you grew up with, as they will have had an influence on you.  Were they positive or negative?  Was money talked about in your household? This timeline might help you prompt some memories.
  • Check your credit score.  There are a number of free providers out there, it’s worth selecting one and looking through your report.  Is the information correct?  What does it suggest that you do to improve your credit score?  There may be some quick wins that will help you to feel like you’re making progress.
  • Create a plan for paying off debt.  Debt often swallows any hope of financial independence and security, the less you have of it the better.
  • When you spend, spend consciously and with intention.  This may mean making a note of every bit of spending for a few weeks but, by doing so, you are likely to start thinking differently about any spending habits that you are trying to change.
  • Celebrate your successes!  Paid off a credit card?  Reached a savings goal?  Take a moment to pat yourself on the back, it’s a great achievement, you’re making progress!
  • I’m going to finish on a big one.  Have a ‘no spend’ week.  This isn’t quite what it sounds like.  Yes, by reducing your spending then you will be saving money but that’s not what this is about.  What’s more important is to really dial in to your thoughts and emotions during the week.  How often were you tempted to spend?  What  happened before you felt the urge to spend?  Did you resist the temptation?  Start to note down some observations of your behaviours and start to find patterns.  It will hopefully give you an insight into what is going on for you and that’s when change can really start.

Here’s to 2025 and creating positive financial habits!  You’re never alone, drop me a line if you’re ready to get started.

Please note: This blog is for general information only and does not constitute advice.