New year, same financial plan. Here’s why

The “new year, new me” trope is prevalent at this time of year – and while common, this attitude may not help with your financial plan. Find out why here.

“New year, new me” is a phrase we’ve all heard time and again in movies, TV shows, and perhaps among friends and family too.

The arrival of a new year is often seen as an opportunity for change, and while there is nothing wrong with this in principle, the idea of undergoing a transformation each January can be unhealthy in some cases.

Sadly, these quick fixes don’t seem to work too well. While finder reports that 3 in 10 Brits will make financial new year resolutions for 2024, research published by British GQ reveals that on average, two-thirds of people abandon their resolutions by the end of January.

So, should you make financial new year resolutions, and what alternatives are there to an annual overhaul? Keep reading to find out all this and more.

There is nothing wrong with recognising unhelpful financial behaviours and striving for change

It’s important to be self-aware when it comes to your finances – and if you know there are behaviours and habits you’d like to change, the new year could be an ideal time to start.

These might include:

· Living beyond your means

· Paying debts late or missing payments altogether

· Chopping and changing your financial plan often

· Not keeping up with self-assessment tax returns.

As the new year begins, it’s crucial to remember that habits take a long time to form. If you have been stuck in a loop of unhelpful financial behaviours for some time, it won’t take just a few days to set things straight.

In fact, according to behavioural researcher and author James Clear, it usually takes 66 days for a habit to form. This could be even longer if your current habits have been ingrained for years.

So, making sure you have a long-term plan, rather than expecting to change your ways in just a month or so, could help you to see these changes through for the full year and beyond.

Changing your financial plan every year could be harmful to your long-term goals

While there is no harm in recognising the need for change and striving towards it, changing your financial plan on an annual basis may not produce the results you desire.

This is especially pertinent when it comes to your investment portfolio. Attempting to time the market in any investment context is usually a fruitless endeavour, as it’s impossible for anyone – even a financial professional – to predict exactly how markets will move in future.

So, if you review your financial circumstances every January and come up with a new bright idea that seems like it would produce better returns, it’s important to be aware that this changeability may not be conducive to long-term wealth growth.

Selling investments on a whim, buying up more stocks than you can afford in a trendy new sector, or impulsively taking on a new financially weighty project each year may hamper your portfolio’s ability to grow.

On the other hand, there are countless examples of the benefits of holding investments over the long term.

One study, performed by Nutmeg, looks at the likelihood of seeing positive returns if you had held investments over different time periods between January 1971 and July 2022. The study looked at global markets, not just one index.

Astonishingly, this research found that if you held an asset for just 24 hours, your chances of seeing growth were 52.4%. That’s almost like flipping a coin on gaining or losing money.

On the other end of the spectrum, keeping an investment for 10 years led to a 94.2% chance of positive returns. In fact, the longer an investment was held for, the more likely the investor was to see growth.

With all this in mind, it’s clear that the “new year, new me” approach might not work for your financial plan.

Alternatively, viewing each year as a building block towards long-term success might be a more lucrative approach.

Working with a Kellands financial planner may help you form a wealth strategy that actually sticks

If you are making financial resolutions this new year, you could enlist the help of a professional who can assist in forming a financial plan that lasts a lifetime, not just for 2024.

We can help you improve your financial behaviours while sticking to a robust financial plan that is designed to withstand circumstances beyond your control, including:

· Stock market volatility

· A death or illness in your family

· Rising inflation and interest rates.

With these factors accounted for, we can then help you to plan for the exciting parts of life, such as:

· Milestones celebrated by the next generation, like weddings and births

· Your and your spouse’s retirements

· Travel experiences you’d like to have in later life.

If you’d like to learn more about creating a financial plan that works for you and your family, get in touch today.

Email us at, or call 0161 929 8838.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

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.


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