Common New Year Money Resolutions Mistakes to Avoid

Default Profile ImageBen O'Connell
New Year Money Resolutions

Who doesn’t want to be rich? Setting New Year resolutions related to money is a positive and common practice.

However, there are certain financial goals that, due to their impracticality or lack of specificity, may be hard to achieve. Were the money-related New Year resolutions that you set doomed from the start?

Avoiding common mistakes is important, so before you make a big money move this year, consider these money resolutions and what they all mean for you.

New Year Money Resolutions

Save More Money Without a Budget

While the intention to save is admirable, a resolution to save more money without a clear budget or financial plan will likely fail. Without a realistic spending plan, it’s challenging to determine how much can be saved consistently.

A good budget serves as a comprehensive financial roadmap, aligning income with expenses and goals in the name of a balanced, sustainable money life. 

A well-constructed budget considers both short-term needs and long-term aspirations, ensuring that essential expenses are covered while allowing for strategic savings and debt repayment.

Reasonable budgets are realistic and adaptable, reflect your unique priorities, and acknowledge that financial circumstances can evolve. It’s a proactive tool to empower and inform, avoid unnecessary debt and build a solid financial foundation for the future. 

Financial independence is a long-term goal that requires careful planning and consistency. Another common resolution is to achieve financial independence overnight, which lacks the strategic approach needed for sustainable wealth-building.

Don’t be so hard on yourself! A select few lucky unicorns have become wealthy overnight. Stick to a budget, get real with your spending, and trust the process. 

Become a Stock Market Expert and Double Investments

Investing in the stock market requires knowledge, research, and sometimes a bit of luck. Setting a resolution to become an overnight stock market expert and double investments might be unrealistic and lacks a clear path for learning and making informed investment decisions.

An investment journey should start with strategy and education. Read books, take online courses, and visit reputable websites like Sorted and Sharesies to gain a foundational understanding of investment principles, risk management, and market dynamics. 

Familiarise yourself with different investment vehicles, including stocks, bonds, and mutual funds, and explore various investment strategies to align with your financial goals. 

Consider seeking guidance from financial advisors or joining investment forums and communities to benefit from collective wisdom and insights. 

Start with a small amount of money you can afford to invest and potentially lose, employing a diversified approach to mitigate risks. 

As you gain experience, gradually expand your investment portfolio and stay informed about market trends and economic indicators. 

Patience and a continuous commitment to learning are key to developing the knowledge and confidence needed to navigate the complexities of the investment landscape successfully.

Pay Off All Debt and Become Totally Frugal 

Paying off debt is a worthy goal, but setting an overly ambitious resolution to eliminate all debt in a short period may not be feasible. It’s more practical to set specific, incremental debt reduction goals over time.

In the same vein, while being mindful of spending is essential, setting an extreme resolution to cut all spending and live a frugal lifestyle every day might lead to burnout. Sustainable financial habits are often built through gradual changes rather than drastic measures.

A common example is deleting Uber Eats or Doordash and planning to eliminate all restaurant meals or takeout orders, but that may be impractical and challenging to maintain. A more achievable goal could be to limit dining out to a specific number of times per month or to allocate a set budget for such expenses.

Start a Side Business and Make a Fortune

While starting a side business can be a great idea, expecting immediate financial success may be unrealistic. Building a successful business takes time, effort, and careful planning.

Starting a small business with limited funds is so possible. You can leverage existing expertise by identifying a niche or service that aligns with your skills and passions. 

Keep initial costs low by operating from home, utilising free or low-cost business tools, and focusing on essentials. 

Establish a lean business model and consider alternative funding options, such as crowdfunding, microloans, or seeking support from friends and family. 

Embrace the power of digital marketing ,successful website and social media to promote your business inexpensively, targeting a specific audience. Prioritise customer feedback and adapt your offerings based on their needs. 

And as your business grows, reinvest profits wisely and explore opportunities for scaling. A combination of creativity, resilience, and strategic financial management can empower entrepreneurs to turn a modest investment into a flourishing small business.

Stick Strictly to a Cash-Only Lifestyle

 While using cash for transactions can help control spending, strictly adhering to a cash-only lifestyle might be challenging in today’s digital world. A more realistic approach is to set spending limits and use digital tools to track transactions.

Never Use Credit Cards Again

Completely swearing off credit cards may not be practical, especially when considering the convenience and benefits they offer. Instead, a more achievable resolution could be to use credit responsibly, paying off balances in full each month.

Don’t Let Money Control Your Life

Money leads to a lot of happiness, but how come the rich still have problems then? 

By decoupling self-worth from financial status, individuals can navigate life with resilience, creativity, and a focus on holistic well-being, fostering a sense of freedom that transcends monetary constraints.

To increase the likelihood of money resolution success, it’s important to set realistic, specific, and achievable financial goals. If you can, think about how your finances also impact your overall well-being.

Breaking larger objectives into smaller, actionable steps and incorporating flexibility into your plans can contribute to a more prosperous financial journey.

It’s undoubtedly a privilege to have a healthy financial life, as is the act of setting resolutions, in a way. Everyone’s situation is different, and making the most of what we have lies at the heart of financial literacy, no matter how rich you are.

Cultivating a healthy relationship with money involves budgeting wisely, saving for the future, and investing in experiences that bring genuine joy. You’ve got this.