Hoping “New Year, New You” Makes Financial Goals Come True?
Made New Year’s resolutions to improve your financial wellness in 2025?
Now is when many of us reflect on what we’ve accomplished and where we fell short. This introspection often leads to the creation of New Year’s resolutions, with financial goals ranking high on the list. Whether it's paying down debt, saving more, or investing smarter, the start of the year feels like an ideal time for a fresh financial start.
Yet, people often struggle to make lasting changes to their financial habits. Understanding the reasons behind these challenges can help create more sustainable financial planning strategies for the year ahead.
Let’s examine 5 common challenges.
1. Unrealistic Expectations - A common reason why New Year’s resolutions fail. Take someone who wants to save 50% of their income or pay off long-standing debt in a short period. While ambitious, these goals often don’t align with one’s current financial reality, thus frustration and discouragement occur when progress is slower than expected. Setting unattainable goals results in burnout and abandonment.
Resolution: Break goals into small, manageable steps. Instead of resolving to pay off a debt in one year, consider reducing the balance by 25% in 6 months. If you end up with more, great, but an incremental approach brings accomplishment and makes the goal feel more achievable.
2. Lack of a Clear Plan - Vague goals like "save more money" or "get out of debt" lack actionable steps, making it difficult to execute. Without a structured plan and understanding your “why”, it’s easy to become distracted by day-to-day life, leading to stagnation.
Resolution: Develop an outline of specific considerations, steps and timelines. For example, if building an emergency fund is a goal, then create a budget, set up logistics like automatic transfers and monitor progress/spending to stay on track.
3. Failure to Track Progress - An easy way to lose sight of financial goals is not having scheduled check-ins. It doesn’t need to be weekly or even monthly, but there needs to be consistency in times to review and identify where adjustments are needed. Without this, bad habits persist or worse, form, and now you’re battling to unwind new problems.
Resolution: Leverage technology and objective people that are unafraid to tell you much-needed truths. For many couples, an outside intermediary saying what needs to be said greatly benefits relationships. Also, make sure you celebrate milestones along the way.
4. Emotional Spending and Instant Gratification - Many struggle with impulse spending or seek instant gratification, especially after a stressful day. Afraid to look at your Amazon spending history? This behavior derails the best-laid financial plans.
Resolution: Identify triggers and implement strategies to delay or review purchase decisions. Create a spending prioritization strategy by identifying where you want to spend your money, this helps shift focus from immediate desires to long-term financial goals.
5. Lack of Accountability - Some are great at executing on their own, for others going it alone can make sticking to financial goals even more challenging. Without a support system or accountability partner, it’s easier to lose focus and fall back into old habits.
Resolution: It goes beyond someone telling you “No” when needed, as by sharing progress and/or changes along the way, an accountability partner can help reassure you’re on track and motivate you with confidence to keep pushing forward.
Conclusion
Financial resolutions are a powerful tool for creating long-term financial security, but they require more than just wishful thinking.
Maybe it’s time to socialize your goals, set monthly action steps to create fresh start moments, and leverage an accountability partner (i.e. Certified Financial Planner) to make your 2025 resolutions happen.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, www.PlanDynamic.com. Glenn is a fee-only Certified Financial Planner™ helping motivated people take control of their planning and investing, so they can balance kids, aging parents, and financial independence.
The original article appeared in the January editions of Local Town Pages for Holliston, Natick, Ashland, Franklin, Hopedale, Medway/Mills, Bellingham, and Norfolk/Wrentham. Additionally in 1st weekly edition of Community Advocate for Shrewsbury, Westborough, Northborough, Southborough, Grafton, Marlborough, and Hudson.
Please call me at (508) 834-7733 or directly schedule a meeting to learn more about considerations for planning and investing so you can balance kids, aging parents, and your financial independence.
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