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Sticking to your financial resolutions for 2024
If your New Year began with the promise to make positive change in relation to your health, you are not alone.
As many as 62% of Britons were thought to have made a commitment to improving their physical wellbeing in 2024, making it the most common type of New Year’s resolution, according to one survey.
Second place on the resolution priority list, meanwhile, was reserved for money matters, highlighting how people are keen to get their finances – as well as their physique – in good order for the year ahead.
While setting financial objectives might be regarded as comparatively simple, it can be a highly involved task. And, like many admirable ambitions to make it from couch to 5k, it’s easy for targets to fall by the wayside if you are not set up to succeed.
Building better habits
That many people have a healthy appetite for setting financial goals is understandable in light of recent history. The turbulence caused by the pandemic and the subsequent cost-of-living crisis has been a catalyst for securing closer control over personal finances. This can manifest itself in terms of instilling better budgeting habits, placing limits on discretionary spending, and increasing efforts to establish a more resilient financial base.
And even in the context of a challenging economic backdrop, there is evidence that this combination of factors is bearing fruit, with a reported 42% fall in the number of people living from payday to payday between 2022 and 2023. Furthermore, a survey of financial resolutions for 2024 found that the most popular priority was building up a rainy-day fund (selected by 31% of respondents) followed by an intention to invest (selected by 18%).
The fact that more people are considering adopting better financial habits, let alone making resolutions to support those aims, is clearly a promising sign. It does not serve as a guarantee, however, that an individual will deliver on those promises – only around a third (31%) of us who made resolutions in 2023 claim to have kept to all of them.
Setting achievable goals
There are various reasons why an individual might fail to meet their financial goals. Sadly, many are doomed from the start, particularly when they are made in haste and the targets set are either unachievable, vague – or both.
In contrast, by setting goals that can be defined as SMART – specific, measurable, achievable, realistic and time-bound – the chance of success is increased. An example would be deciding on an affordable regular amount that can either be put towards paying down debt, bolstering pension savings or investing for possible future returns.
Taking the first step on this path can often be the most difficult, and some people might even feel paralysed by a sense of inertia. This can be triggered by a lack of understanding around financial matters, anxiety over the breadth of options available, or simply a feeling that they might have ‘left it too late’.
Overcoming those psychological barriers is vital if good habits are to take root and flourish, allowing a greater feeling of financial control to be introduced. In situations such as this, it can be helpful to seek the advice of a regulated financial adviser who can look to understand your circumstances, clarify your goals and help work towards achieving them.
A helping financial hand
With the expertise of a finance professional, barriers related to a potential lack of knowledge can easily be overcome. And while it’s true that savings and investments typically benefit from a long-term approach that exploits the effects of compounding, advisers can also underline why it’s never too late to put financial plans in place, providing a steer on the strategies and factors that can maximise your efforts in pursuit of particular objectives.
Working with a trusted adviser can also be invaluable in helping maintain momentum over time. As anyone who has made a New Year’s resolution will recognise, aims can easily be abandoned when you either lose enthusiasm or focus. This can be avoided, however, with ongoing support and communication alongside regular reviews that look at what progress has been made and reflect on whether there is a need to recalibrate your position.
Because, while a simple promise can have a transformative effect when it comes to setting and achieving financial goals, your chances of success can be improved by accessing the right help and maintaining the right mindset. After all, it’s one thing to make a resolution but quite another thing to find the resolve to achieve it.
The information contained within this communication does not constitute financial advice and is provided for general information purposes only. No warranty, whether express or implied is given in relation to such information. Vintage Wealth Management or any of its associated representatives shall not be liable for any technical, editorial, typographical or other errors or omissions within the content of this communication.
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