14 January 2025
general
For many, the new year is a time for fresh starts, new beginnings, and, of course, new year resolutions. Whether the goal is to eat more healthily, exercise more, or save money, these resolutions can be motivating.
However, despite our best intentions, they often fade away as the year progresses.
The allure of a quick fix is strong, but true financial success requires a long-term, strategic approach. That’s why you don’t necessarily need to set new financial goals each year. Instead, you might wish to focus your energy on growing your existing plans and building your wealth with purpose.
Here’s why new year resolutions might not work for your financial plan, and some alternative, long-term strategies to consider.
Most new year resolutions fail by the end of February
Millions of people across the UK set resolutions each year. According to Finder, 43% of people set goals to improve their health and wellbeing, but financial goals are a close second at 32%.
However, a report from Elite Business states that 80% of those resolutions will have fallen apart by February.
Indeed, human beings are inherently goal-oriented but often fail to achieve our ambitions for a plethora of reasons. As Mark Jellicoe, a senior lecturer in psychology at The University of Law explains: “Resolutions, or goals, are like alchemy. There are many reasons why we fail to achieve our resolutions. Often goals can be too vague, or, in reality, the resolution might be a wish that we are just not that committed to.”
It stands to reason, then, that lasting change requires commitment. Commitment also requires time and dedication.
That’s why taking a long-term view of your financial plan, rather than setting arbitrary new year resolutions, could serve you well.
Here are a few top tips for sticking to your long-term financial plan.
Develop your long-term mindset
Most elements of your financial plan require a long-term view. Whether you’re planning a long, happy retirement; thinking about inheritance planning; or investing to gain financial freedom later in life, chopping and changing your strategy could impede a successful outcome.
For example, while it’s clear that many enjoy the appeal of a quick fix, maintaining a long-term investment mindset could be more worthwhile.
Indeed, investors who can focus on the long term may be able to build value more reliably. Remaining invested for longer periods could offer better results, because your wealth has a greater chance of riding out short-term fluctuations.
For example, a piece of research by Nutmeg suggests that the odds of seeing a positive return increases the longer you’re invested, regardless of the world events that affect markets during your investment time frame.
So, setting financial new year resolutions might not be the right move for you, as that temptation to shift the goal posts could derail your progress.
Rather, it could help to focus your energy on your long-term plan. Talk to your adviser about the progress of your portfolio and let us help you cement your financial plan through regular conversations and active wealth management.
Remember that acting on impulse could alter the course of your long-term plans
A core part of maintaining a long-term plan is refusing the temptation to act impulsively.
For example, if you’re building a portfolio of investments to pass on to the next generation or support yourself in retirement, impulsive actions in the form of “new year resolutions” could impede your progress towards these goals.
This impulsivity might look like:
You may be tempted to change course during an economic crisis, or even act on the advice of friends or peers, setting new year resolutions that will act as a “fix” for your portfolio. However, you could potentially miss out on thousands in growth by doing this.
Keep in mind that other people’s goals, risk tolerance, and financial situations could be very different from yours, and that staying the course is likely to produce a more reliable outcome.
The same goes for other areas of your financial plan, too. If others are making new year resolutions that don’t align with your long-term plans, stop to think about your own circumstances before acting on a whim.
If you are ever in doubt about whether you’re on course where your wealth is concerned, speak to your financial adviser first. We can help.
Speak to your adviser if your priorities do change
While long-term planning is paramount for building wealth, certain life events can change how you perceive your priorities and may make it necessary to alter your plans.
For example, if you’re getting divorced, you may need to revisit your financial plan. If your children need financial support, you may be inclined to use some of your own money to help them out.
Or, if you receive an inheritance and are perhaps able to retire sooner than you’d planned, your financial adviser is well placed to offer guidance.
Furthermore, your adviser will ensure that once you’ve overcome any short-term hurdles or embraced new change, your long-term plan is set into motion.
Get in touch
We’re always on hand to help you maintain your long-term financial plan.
Email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
