Money resolutions and how to stick to them

More than half of people (59%) will make financial resolutions this year, but more than a third say they’ve never actually managed to stick with one for more than two months in their lives.

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Making changes that last isn’t easy, so we shouldn’t beat ourselves up if we struggle.

However, there are five secrets to keeping a new year’s resolution that we can use to our advantage.

We know from health resolutions that if we pledge something vague – like to eat a bit healthier – we’ll find ourselves tucking into a Mars Bar by lunchtime.

We have far more luck if we actually make a specific pledge – like eating five portions of fruit or vegetables a day, or not snacking during the week. The same goes for our finances. There’s no point in pledging that we need to be better with money, or stop overspending in general.

We need to work out the habits that are leading us astray – like payday shopping or using buy now, pay later without thinking it through – and then pledge to cut those out.

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Change is hard, so a complete overnight lifestyle transformation is going to be incredibly difficult to stick with. It’s far better to set clear, achievable goals, one at a time. Where you start will depend on your priorities, but don’t try to do everything at once.

If you have to sacrifice things you love every day, you’ll be making your life needlessly difficult. So consider manageable ways to hit your goals.

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You might, for example, be able to swap direct debits for things you don’t really value – like unused subscriptions – for ones that work towards your goals, like emergency savings or pension contributions.

Alternatively, you can identify situations when you tend to spend money you can’t afford – like scrolling through your phone late at night – and put temptation out of reach – like leaving your phone in the kitchen after dinner.

You can set up direct debits so you don’t need to do anything active in order to do the right thing. This might be into a saving account if you want to build emergency savings, or into a regular saver if you’re keen to invest.

Set this up to come out of your account just after payday – before you have a chance to spend it.

If you’re committing to a new habit, you need to work out where this money is going to come from, or you’ll run into a financial dead end.

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It’s why so many resolutions need to start with drawing up a budget, looking at where you’re spending, and identifying specific cuts that will free up the cash you need.

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