Three reasons money resolutions fail and how to make yours stick

Help to Save: Financial planning expert on benefits of scheme

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Unfortunately, around 80 percent of New Year’s resolutions fail because of three things which can easily be avoided. When it comes to New Year’s resolutions, opinion is divided as to whether they are a good idea.

That said, planning for the future can’t be a bad thing especially when it comes to finances.

Tackling debt or saving for the future are usually near the top of the list for Britons when it comes to New Year’s resolutions – making up 20 percent of typical goals Britons would like to accomplish in the year ahead.

For those determined to succeed there is some expert advice people can follow to avoid their financial resolutions failing this year.

One of the main reasons for resolutions failing is because the goals people set themselves are too overwhelming.

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.

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Another common reason for failure is when people are too vague about their New Year goals.

While they might be determined, some people could be going wrong because they aren’t specific enough.

For example, resolving to ‘curb spending’ will be less effective than committing to save £300 a month.

Being specific helps 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 percent of people who make New Year’s resolutions have dropped them by the second week of February.

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Investment advisor Cynthia Pruemm, said that first and foremost people should be putting together a financial plan for 2022.

Ms Pruemm said: “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.”

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