Avoiding Another Januworry

REVIEWING YOUR BUDGET: HOW TO MAKE YOUR FINANCIAL NEW YEAR'S RESOLUTIONS LAST

- By Allan Gray

By now we have all made our new year's resolutions and for many cash-strapped consumers this means also making plans to handle and manage your finances better this year to prevent having to deal with Januworry again next year.

“Most people consider the start of a new year as the perfect time to set financial goals but without the right support, it becomes easy to give up when faced with hardship,” says Nomi Bodlani, head of direct and private clients at Allan Gray.

Recent research by PLOS ONE, a peer-reviewed science and medicine journal, on the success rate of new year's resolutions, suggests that not all resolutions are equally effective.

According to the research, people who set approach-oriented goals and receive support along their journeys are more likely to achieve them than those who set avoidance-oriented goals or do not receive support.

Approach-oriented goals focus on taking active steps towards an outcome, such as saving a stated portion of your salary towards an emergency fund, which you aim to accumulate within a fixed time period.

Avoidance-oriented goals, on the other hand, rely on self-restraint and the avoidance of undesired outcomes, such as unbudgeted consumption or spending excess cash. Support can be as simple as identifying someone to encourage you to remain committed to achieving your goal, or more structured in the form of partnering with a financial advisor.

The research, conducted among over 1,000 people, found that 58.9% of those surveyed considered themselves successful in achieving their approach-oriented goals a year later. In contrast, only 47.1% of those who set avoidance-oriented goals felt the same.