Financial New Year resolutions 2024: How to set realistic and workable aims you can stick to

The most common pledges are to save more and spend less, get on top of our finances and pay off our debts.

We also want to put more into our pensions, because an awful lot of us know deep down that we’re falling short.

I cheated with my resolutions this year, because my workplace pension renewal came up in December, so I’ve already arranged to increase my contributions next year, and can put my feet up in January.

However, for those who need to make more of an effort with their resolutions, there’s some bad news.

Our research shows that of those people who’ve made money-related resolutions in the past, one in 20 haven’t even made it to the end of January 1st before giving up, while around one in five fail before the end of the first week, and more than one in four give up before the month is out.

There’s a school of thought that says these resolutions are always doomed, because it’s the wrong time of year to be trying to change our lives.

The argument is that it’s cold and miserable, we’re recovering from the holidays, and we don’t need more misery in our lives.

However, this ignores the power of the new year. The ‘fresh start effect’ acts as a psychological line in the sand that actually makes it easier to stick to our goals.

So the problem isn’t with the ‘New Year’ it’s with the resolutions themselves: it seems we’re not brilliant at making pledges we can deliver. Fortunately, there are seven tests you use to make sure yours stand the test of time.

Is it specific?

One risk is that we opt for something vague like, ‘I want to save more’, without a specific goal in mind like: ‘I’m going to free up £50 a month by cutting my spending, and put into a savings account.’

It’s the equivalent of saying ‘I want to be healthier’, instead of ‘I’m going to cycle to work’ or ‘I’m going to cut out snacking.’

Is it realistic?

If we set unachievable goals, we tend to get overwhelmed and give up. It’s one reason why so many people who got excited about saving the vast majority of their income and retiring at 40 got fed up of baked beans and staying in, and decided to work until they drop.

The aim is to pick something you can stick with – like increasing pension contributions by £50 a month, for example. It’s enough to make a difference, without necessarily being an unimaginably impossible figure to find each month. Of course, only you will know what’s realistic for your budget.

Do I have too many of them?

Making a change is difficult, so while you may want to transform your life, the best way to stick to a resolution is to find the most important one, and focus on that.

This will depend where you are. If you have serious short-term debts, the priority will be to pay those off.

If you have a family and no will or insurance, that could be top of your list. If you’re on top of your debts but don’t have enough emergency savings, you can start there.

At the same time, it’s worth keeping an eye on the long term, and your pension. Once all those things are in hand, you can consider investing to make the most of your money.

Do I have a sensible plan to make it happen?

If your resolution involves putting more money into something – like debt repayment or savings – that cash needs to come from somewhere or you’ll just end up creating a new problem for yourself.

It means financial resolutions often start with a budget, so you know everything you’re earning and everything you spend.

This includes monthly costs, but also a share of less regular costs like Christmas or car repairs. Once you can see where the money is going, you can identify the costs you need to cut to hit your target.

Does it rely on me giving up something I love?

In some cases, you’ll need to forego something you love to save money – especially if it’s an expensive luxury.

However, you can’t leave this as a blank space in your life, or it’ll be too hard. Find something to replace it with.

If, for example, you need to stop a regular dinner out with friends, you can replace it with getting friends over. You don’t need to feed them: dinner with friends is never really about the food.

Does it mean doing the right thing every day?

All power to the people who can manage to make endless good decisions, but for the rest of us, it’s a good idea to make things as easy as possible, so you don’t have to.

If you’ve pledged to save more, for example, don’t try to keep cash in your account at the end of the month. Set up a direct debit to come out on payday and go into a savings account or select ‘round ups’ on your current account, so every transaction is rounded up to the nearest pound and paid into savings.

Is there an easier way to achieve the same thing?

Cheating is a real plus point of a good resolution. When you’re making plans to cut costs, for example, you might start with difficult sacrifices. However, before you go there, why not start by giving up the things you don’t get anything extra for – like expensive broadband when there’s a cheaper provider, a big media package when you largely watch free channels, or boring branded groceries like washing up liquid.

This could be your big chance to give up a gym membership, and be the one person who gets to make a positive resolution not to go to the gym this year.

House prices in 2024

It’s traditional to check the crystal ball at this time of year, but unfortunately for the property market, the results are pretty gloomy.

There’s a bit of good news on the horizon, because inflation is set to fall slowly through the year, which means we’re likely to get at least one interest rate cut at some point. However, inflation is expected to stay stubbornly high for a fairly long period, which means rate cuts are unlikely until the second half of the year, and even then, they’ll move at a glacial pace. It means anyone remortgaging, or getting a mortgage for a new house, is going to pay handsomely for it.

As a result, property prices are likely to struggle. They’ll also face a weak economy, and if that means job losses or wage freezes, the impact could be even worse. As a result, the Office for Budget Responsibility expects property sales to fall another 6.9 per cent in the coming year – and prices to drop 4.7 per cent. So at this stage, it looks like 2024 isn’t going to be a golden year for property.