Peter McGahan: New year’s ‘financial resolutions’ tips

Your financial goals should be aligned with your values.
Your financial goals should be aligned with your values.

LAST week I covered many of the issues with financial stress, so I’ll cover a few answers this week.

Over the last 25 years of writing financial columns, I’ve witnessed first-hand all aspects of financial stress on readers, irrespective of their wealth (please trust me on this).

What will change our feelings is our relationship with money and our understanding of it.

And so, to some new year’s resolutions.

Firstly – resolutions of any shape or form only work when the reasons for doing it are real.

The subconscious controls your actions and the subconscious will reject any ‘wish’ as a dream, and will hijack any actions you may be considering.

A resolution will be real if your why behind it is real. Google ‘Simon Sinek start with why’ and there is an 18 minute video there for you to watch.

Then you will know your ‘why’, whether it’s in business, to do with family and relationships, or just money.

Now, consider your goals and what you really want to do over six months, a year and five years.

A bit like my pantry money, fridge money and freezer money metaphor. Make them separate.

What is the ‘why’ behind them? Your financial goals should be aligned with your values.

Over brussel sprouts, ask your family what they think your values are and get them to describe you at your best? Ah just do it.

Now that you are off the blocks, you’ll need some tokens to achieve that. Some people call tokens ‘money’ these days, but they are just tokens. They give you options, that’s all. Its healthier to think of them that way.

Think of your pot of tokens as a great big glass jar full of water and a tap. Your job is to keep pouring into it, and to control the flow of the tap. Nothing else matters in financial planning. Put it safe so it doesn’t fall over of course.

Write all your spending down and tag it as ‘needed’ or ‘frittering away’. By doing so you begin to become aware – the first stage of change.

If you have some ugly brown envelopes around, open them. It’s OK to feel overwhelmed, we all do it, and it’s OK to try and protect ourselves by procrastinating. That’s normal. But at some point, between now, and 60 years from now, we have to open envelopes. So, when is the best time? Yes, you are right.

Take one envelope, open it, deal with it and gain the energy and feeling of acting on it. Rinse, repeat. This gives you back one of the most important emotional strengths that brown envelopes can impact - your feeling of control. Start small, and, one by one, you take control of everything.

Look at what causes unhealthy spending. Our nine emotional needs (google ‘what are the human givens’) show that when they are not being met in healthy ways, we meet them in unhealthy ways.

Spending, partying, feel good purchases, can be examples of these. So, in the same way we wouldn’t turn the heating up in the house to deal with a broken window, we address these emotional needs like a broken window.

You don’t need to ‘earn more’, sometimes you just need to close the windows and insulate the house first.

Eat well, sleep properly, and focus on what you can control and what matters. That will prepare you best for most decisions in life.

Don’t compare yourself to anyone. Just don’t. It’s never the same as their social media post or gleaming car might suggest. And it doesn’t matter. Look where you are going not where they are going, or you’ll trip on something and hurt your wee toe.

If you are spending, lean into that emotion and ask why, then take responsibility. I teach my girls to just repeat: ‘I am responsible’ over and over again.

More debt tips next week, but goal number one for everyone: if you have credit card debts. Get rid of them. If the credit card companies had values or morals, they wouldn’t have credit card companies.

Consolidating onto either a mortgage or secured loan will save a minimum of 66 per cent in interest costs and you can use that saving to repay the capital.

Most importantly in goal setting, just take action and remember that any movement in you, no matter how small, towards improvement, is stronger than any storm you will face, as it’s an expression of hope, of desire and of your control. Tie your laces, carry on…”

Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. For advice on borrowing, get in touch with Pat Greene on or call 028 6863 2692.