It’s now the second week of the new year and many would have started dropping their new year’s resolutions. Here is why money resolutions fail and how to make yours stick.
One of the main reasons for resolutions failing is because people are unrealistic with their goals.
Psychologists agree that it is common for people to put too much pressure on themselves at the beginning of the new year, only for it all to come crashing down a few weeks in.
So instead of making a resolution to pay off £5,000 worth of credit card debt in 2022, set smaller goals within smaller time frames.
Experts recommend breaking the goal down into monthly payments of £415 a month, which also helps people to see where that money can be saved.
Another reason is that people are too vague about their new year goals.
For example, resolving to ‘curb spending’ will be less effective than committing to saving £300 a month.
People aren’t specific enough with what it is that they want to achieve. By pinning down exactly what they want to achieve, can help people focus on their goals, which experts say really helps the outcome.
Once resolutions have been set for the year ahead, something as small as being accountable to another person could be the difference between success and failure.
Whether this is with a partner, friend or debt advisor, speaking openly about goals and publicly committing to them can really help, psychologists say.
Working together with others can also make a huge difference and help people stay on track after the first few weeks.
Approximately 80 per cent of people who make new year’s resolutions have dropped them by the second week of February.
“One important financial resolution for 2022 should be putting together a financial plan.”
“Part of this process is doing a financial analysis of your income, expenses and investments.”
“Another resolution should be saving every month regardless of the amount.”
At Thamesbank, we have a range of savings accounts to help you towards your financial goals. You can find out more here.
About the author:
Mukesh Malhotra is the Chair of Thamesbank Credit Union. You can find out more about him here.