New Year resolutions

At this time of year many of us have already started our New Year resolutions for 2021.

The most popular seem to be:

  • Give up smoking/ lose weight/ be more healthy
  • Take control of finances

Many resolutions fail early on in the New Year and often this can be due to trying to “do battle on too many fronts”. We all only have a certain amount of willpower and if we dilute this into too many areas, we can lose effectiveness, a resolution fails and we feel despondent.

The key is to pick your battles and focus on one area at a time. By doing this, the chance of success increases. Success breeds success and by achieving one resolution a positive attitude can result.

You may ask what does this have to do with financial planning? 

Many of our clients look for help in keys areas such as retirement planning and investment advice. An often-overlooked area however, is household budgeting. This can often be the key to financial freedom, as the old saying goes “look after the pennies and the pounds look after themselves”. 

As Morgan Housel puts it, “Personal finance is more important than investing, at all income levels, because a good saver who doesn’t invest will be fine but a great investor mired in debt and overspending can be wiped out

The best solution therefore, would be to have good personal finance and sensible, suitable investments and pensions.

This year why not set a goal to make a household budget by sitting down at the beginning of the month and working through the anticipated monthly outgoings and then review as the month goes on week by week. This is the key to paying off unwanted debt such as credit cards and overdrafts.

Once these are paid off, a feeling of satisfaction is likely to follow and the financial discipline now achieved can be used to save money for more exciting goals such as holidays and Christmas and long-term goals such as retiring early.

Having an awareness of income and expenses demonstrates the “scarcity of resources” that most of us have and the need to deploy our money in the most prudent manner.

Warm regards and a Happy New Year.


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