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Ten strategies to fulfill your New Year’s financial resolutions

Achieving the goals we set at the start of the year is often challenging—not necessarily due to a lack of willpower, but because of the absence of a clear method. If improving financial health is the objective, certain key principles can help us live comfortably now while planning for future well-being.


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How to fulfill your New Year’s financial resolutions

Fulfilling financial resolutions hinges not just on motivation but on establishing a concrete plan with a clear, attainable path. These are not drastic changes but small habits that can yield significant results over time. This New Year, turn your financial resolutions into reality with these ten practical tips to move confidently toward a more secure and stable future.

1. Maintain a healthy income-to-outgoings ratio

Financial well-being starts with balancing earnings and expenditures. Accurately assess your income and design a short- and medium-term spending plan. Categorize expenses as necessary, occasional, or discretionary, and consider which non-essential costs you can reduce or eliminate. Anticipate upcoming expenses whenever possible.

The goal isn’t necessarily to earn more but to manage your existing income effectively and regularly review expenses to keep finances under control.

Calculate your monthly budget and adjust your expenses.

2. Establish an emergency fund for unforeseen events

Spending less than you earn enables savings. "We never know what the future holds, so it’s essential to set aside a portion of your income in case you face unexpected contingencies—which, hopefully, will never occur" advises Javier Niederleytner, a professor of the Master’s degree in Stock Exchange and Financial Markets at the IEB in Madrid, Spain. Making saving a habit is one of the most recommended strategies.

An emergency fund should cover at least three to six months of expenses. This fund is crucial because lacking readily available money in a crisis can lead to debt and interest payments. These are costs that careful planning can help you avoid.

Find out how much your emergency fund should be.

3. Make saving a habit

Even modest amounts matter; routinely saving a portion of your monthly income is vital for peace of mind, security, and financial independence, regardless of circumstances. The earlier you start, the easier it becomes and the better the outcomes.

Some individuals treat saving as a fixed expense, habitually transferring a portion of their income to a separate account. By starting the month without counting this amount, you can organize the remaining funds to cover necessary expenses.

4. Invest surplus savings

Once you’ve saved enough to cover short- and medium-term emergencies, consider investing any surplus, even if it’s a small amount. This step aims to generate additional returns, growing your wealth and, during inflationary periods, preserving your capital’s purchasing power.

Before investingreflect on your objectives: Will you need the money in the medium or long term? How much risk are you willing to accept, including the possibility of losing part or all of the investment? Understanding your personal risk profile is essential in choosing the most suitable products: whether stocks, equity funds, fixed income instruments, or others.

5. When treating yourself, save rather than piling up debt

As consumers, we now have more financial products than ever to choose from to get our hands on products and services and pay for them in installments. However, this does not mean that we should get into debt every time we want something, whether a holiday, a shiny motorcycle for the weekends or some other treat.

Instead of rushing in, we should draw up a savings plan. Having a specific objective will make the slog of saving more bearable and will stop us racking up unnecessary debt and having to make regular loan repayments.

6. Understanding what healthy debt means

The fact that we can pay later does not mean it is safe to take on too much debt. We need to look at our income, expenses and personal circumstances, in order to gauge whether our financial position is healthy and does not make things too difficult to us. When our personal finances are under control, only part of our income goes toward paying off our debts. According to the experts, our total debt should never exceed 35 to 40 percent of our monthly income.

7. Plan for retirement to ensure future financial wellbeing

Good financial health also means thinking further ahead: “The ideal time to start saving for retirement is when we get our first paycheck. If, from the age of 20 or 30, we get used to the fact that part of our income should be put aside for our retirement and if we stick to this savings habit throughout our working life, it makes it much easier to achieve a good quality of life when we retire, which, notably, is getting later and later,” explains Luis Vadillo, of BBVA Asset Management.

With this in mind, it is important to have a good retirement savings plan that provides security so that, when the time comes to retire, we have enough money set aside to enjoy life. Here, depending on the country where you live, we might think about an individual or collective pension plan, an AFORE product (if we happen to live in Mexico) or any other long-term savings strategy.

8. Insuring against the unexpected

Our savings will go up in smoke if some dire unforeseen event occurs and we do not have insurance, meaning we have to spend all our hard-earned savings.

It is certainly worth taking out insurance for things like our car (in case we get into an accident) and our home (in case something goes badly wrong). We would also do well to look at health or life insurance, so that in case something serious happens, our family will receive a sizable payout.

9. Planning to achieve our financial goals

Planning is key to achieving good financial health. To succeed, we must prioritize our goals (housing, family, education, retirement, etc.) and seek expert advice to come up with a plan to achieve them by making carefully thought-out savings and investment decisions.

We should also review our planning from time to time, as our goals may change as the years go by, depending on various circumstances.

10. Taking an interest in and understanding personal finance

We don’t need to become an expert like the professionals, but we do need to pay attention to what is happening when it comes to our money and, above all, to understand what could happen.

Just as it is a good idea to know what’s going on with our own body and understand the positive aspects of doing sports and eating healthily and, on the flip side, the dangers of leading a sedentary life and eating poorly, we also need to understand the implications of our financial decisions. Financial literacy is essential to avoid bad habits and make the right decisions.


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