39% of Brits vowed to make finances their priority in 2024. Paying off-debt was among the top goals, while others prioritised building a healthy savings account or boosting their investment portfolio.
Whatever your goals for the new year, let’s face it - keeping financial resolutions is no walk in the park, which explains why only 11% of us stick to them all year. If you’re hoping to boost your money management skills this year, here’s how to create financial resolutions you can actually stick to.
Why financial resolutions matter
Starting the year with clear financial goals provides a roadmap that helps us swap that ‘where did it all go?’ panic for a plan to spend smarter and save faster. Here are some practical steps to guide you towards a financially healthy 2025.
Step 1: Reflect on your current financial situation
Take stock of your income, expenses, debt, savings, and any investments you may have. This will give you a baseline to start setting realistic resolutions. Below are a few things to consider.
List your monthly income - include your primary income such as your salary or weekly pay plus any side hustles, or passive income streams.
Track your expenses - use a budgeting app or spreadsheet to record every pound you spend. Group expenses into categories like your rent/mortgage, utilities, groceries, dining out, and subscriptions.
Assess your debt - write down all outstanding debts, including credit cards, student loans, and any other liabilities.
Evaluate your savings and investments - review your current savings, including pensions, and any other investments.
Step 2: Set SMART financial goals
Vague resolutions like ‘save more money’ or ‘reduce debt’ can be challenging to stick to. Without a defined direction to follow, you could be more likely to fall at the first hurdle. Instead, model your goals against the SMART framework.
Specific - instead of ‘save money’, specify an amount, like ‘save £5,000 this year’.
Measurable - set a way to track progress. For example, saving £417 per month will get you to £5,000 in a year.
Achievable - set realistic goals that match your financial capacity and lifestyle.
Relevant - ensure your goals align with your long-term plans, like paying off debt if you want to start saving more into your pension each month.
Time-bound - set a deadline, such as achieving your goal by the end of the year or in six month’s time.
Step 3: Prioritise your goals
If you’ve got a list as long as your arm, it’s time to prioritise. It’s easier to achieve a few focused goals than to juggle multiple at once. You want your goals to be sustainable so consider the below.
Categorise urgency - for instance, paying off high-interest debt might take priority over saving for a holiday.
Define your goals - short-term goals might be paying off credit card debt, while long-term goals could include retirement planning.
Focus on one at a time - while you may work on multiple goals, it’s often easier to put most of your effort into one primary resolution at a time.
Step 4: Create a realistic budget
You might find it harder to stick to a budget that’s too restrictive. But the 50/30/20 rule provides a realistic budget while accounting for your hobbies and social life too.
50% for the essentials - these are necessary expenses that we simply can’t avoid, like rent or mortgage payments, utility bills and groceries.
30% for the fun stuff - these are non-essential expenses that make life a little sweeter. Whether it’s dining out with friends, travelling to new places, or indulging in a hobby, we all have wants that deserve to be prioritised.
20% for savings, investments and debt repayment - dedicate a chunk of money for savings, investments and/or paying off debt. This could include anything from savings for a house deposit, adding a little extra to your pension or making other long-term investments.
Step 5: Track your progress
Tracking your progress is crucial for getting those bursts of motivation along the way, as well as some perspective when things aren’t working. Keep on track by considering the below methods.
Monthly check-ins - whether you’ve set weekly, monthly, or quarterly goals, consider setting some time aside every month to measure your progress.
Tracking tools - many budgeting, banking and pension apps allow you to set goals and monitor progress, helping you stay accountable and on track. If you’re a PensionBee customer, you can use your Retirement Planner in your online account, your BeeHive, or our Pension Calculator which is available via our website.
Celebrating milestones - congratulate yourself when you hit specific targets, like paying off a credit card or reaching a savings goal. They deserve a healthy dose of acknowledgment!
Step 6: Prepare for setbacks and adjust as necessary
No plan is perfect, and setbacks (like when the washing machine packs in) are inevitable. The trick is to stay calm and adjust if needed. Make sure you’re staying flexible with these final tips.
Build a buffer - set aside a bit each month for an emergency fund to handle unexpected expenses.
Revisit your goals - life can throw a spanner in the works. If you need to adjust your goals, do it without guilt – just don’t abandon them entirely.
Remember your ‘why’ - remember why you’re setting these goals, whether for security, financial freedom, or a bit of peace of mind.
Evaluate successes and challenges - identify areas where you succeeded and pinpoint what hindered your progress – whether it’s allocating too much to your disposable monthly income or not contributing enough to your pension.
Refine your goals - use what you’ve learned the previous month to set smarter, more achievable approaches the following month.
Start planning today
With the start of a new year, there’s no time like the present to kick off those financial resolutions. Be wary that waiting for the ‘perfect moment’ can sometimes mean it never feels like the right time. Consider using this month to muster up a plan. And remember that sticking to financial resolutions requires dedication and commitment. So grab a notebook, make a cuppa, and jot down your first money goal you want to achieve in 2025.
Maria is a journalist and writer who previously worked as Global Editor at Female Invest. Her writing focuses on gender equality in finance. She’s also written for a variety of other publications including Harper’s Bazaar, The Telegraph, inews, Metro, Glamour and more.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
