New Year’s financial resolutions hang in tatters – how to learn from your mistakes

• 41% of people have made financial resolutions at least once in the past.
• 7% of people who have set themselves financial New Year’s resolutions in the past have never stuck to it for longer than a week. The score is the same for men and women.
• One in six people (16%) have never stuck to one for longer than a month.
• 78% of people haven’t stuck with one for a year – this rises to 89% of those aged 18-34.
• If we keep making resolutions, we have more success – 40% of those aged 55 and over who have made a financial resolution have stuck with it for at least a year.

Figures from a survey of 2,000 people by Opinium for HL in September 2024.

Sarah Coles, head of personal finance, Hargreaves Lansdown

“Around a week into the New Year and already 7% of financial resolutions hang in tatters, after the optimism that carried us aloft into the New Year has been swiftly flattened by the relentless steamroller of reality.

Halfway through the year, two thirds of financial resolutions have fallen by the wayside, and 78% of people who have set financial resolutions say they’ve never, ever, managed to stick with it to the end of the year. Men and women face similar struggles, and the same number fall short shy of a year.

Success rates vary with age, with 40% of those aged 55 and over having stuck with at least one financial resolution for at least a year – compared to 25% of those aged 35-54 and 11% of those aged 18-34. However, there’s a decent chance this owes more to the fact they’ve had more goes at it than any particular resolve that comes with age.

There’s also the chance that older people have had more time to learn from their mistakes – which is something we can all benefit from if our resolutions have fallen at the first hurdle.  Setbacks are all part of the process, so go back to your resolutions and ask five questions to refine them, and give you a decent chance of making it to the end of the year with strong new financial habits in place.

Is this realistic?

If you set unrealistic goals, and try to get there too quickly, you’ll soon run out of momentum. Set realistic, achievable goals, build a budget around them, and allocate a sensible, affordable sum every month to work towards them – whether it’s paying down expensive debts, building emergency savings, or paying into a pension or stocks and shares ISA.

Am tackling the right priorities?

Some things are more pressing than others, so if you have expensive short-term debts like credit cards, it makes sense to tackle them as a priority. Similarly, if you don’t have enough emergency savings to cover 3-6 months’ worth of essential spending, then saving should be near the top of the to-do list. Things like investment are far more exciting, so it can be tempting to jump ahead to those and neglect the boring financial basics. You don’t have to give up on the fun things, just consider them alongside your most pressing priorities.

Am I trying to do too much?

Lifestyle change is hard, so a complete overnight lifestyle transformation is going to be incredibly difficult to stick with. Far better to set clear, achievable goals, one at a time. There’s nothing stopping you setting a goal a month – or every couple of months – so you’re not trying complete overnight reinvention.

Don’t try to do the difficult things first either. Sacrificing things like takeaway coffee seem like clear winners, because it’s essentially a luxury. However, if you give up all the little things that make every day a bit more pleasant, you’ll have to make ten difficult decisions a day, and you’ll eventually give up. It’s a good idea to cut back on these luxuries, but before you give up the things you love, it makes far more sense to give up the things you don’t love at all – like overpaying for your mobile phone or broadband or buying expensive grocery brands.

Is this a destination or a map?

Sticking with a resolution is about having a map rather than just a destination. You’ll know where you want to get to, but it’s just as important to know the first step you need to take to get there – and the second and so on. Don’t just say ‘I want to spend less’, say ‘I want to spend less and I’m going to start by keeping a spending diary for a month to see where my money is going.’

Am I making this too difficult?

Don’t try to do the right thing every day. Set it up to happen without you thinking about it. If you need to build your savings, set up a direct debit to go into a savings account each month. If you want to start investing, a regular saver is a great option, where your direct debit pays into an investment account like an ISA, Junior ISA or Lifetime ISA every month. If you want to build your pension, consider your monthly contributions. Justdo what you can afford, and set it up to come out of your account on payday – before you have a chance to miss it – so you automatically do the right thing every month. You could be surprised at how your nest egg builds. If, for example, you were to invest £100 a month for ten years, and have average growth of 5%, you’d be sitting on £15,528.”

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