November 23 2023 | Team nudge
UK Autumn Budget 2023
The UK Budget Autumn Statement is announced, find out what's changed and help your people make informed financial decisions.
As we come to the end of the first month of the year, many of us will be reflecting on how we got on with those personal commitments we made on January 1st. And we may not be feeling too good.
New year resolutions. We all love making them, but why is that? Well, there is a psychological principle called the “fresh start effect”. We like to begin things at a nice, clean starting point. No one ever started a diet on a Wednesday, did they? We like to use January 1st as a jumping off point for the rest of our lives.
(n.b. Here at nudge we see a similar “fresh start effect” in September – new term, new you – when people are more likely to look at their finances in the run up to Christmas)
2020 is a particularly significant one too. It’s a nice round number (something else us humans appreciate) and despite the arbitrariness of the start of the year, we see every Tom, Dick, and Harry sharing their resolution to eat less, exercise more, or pick up an old hobby.
Resolutions are, inherently, a good thing. People are using the start of the year to do something virtuous (except these people). No matter the reason behind it, people looking after themselves is good for themselves, their family and wider society.
But slowly people start to forget about the commitments the made. People fall off the bandwagons, the gyms go silent and normal business is resumed. When we fail, we scold ourselves for being infinitesimally less than perfect. We lose our streak (yet another thing we love). When we lose our streak, we can’t be bothered to start it again.
This is also the case for us and our finances. We make resolutions to save more, spend less, and to stop shopping online so much. But we fall into bad habits long before the first payday of the new year.
So what can we do about it?
The first lesson is to not beat yourself up about it. If you fall off the bandwagon, treat the chocolate binge as a blip and carry on being good. Find a different gym routine that doesn’t involve waking up at 4am. Or with your finances, make some simple commitments that take the decisions and the opportunities to fail away from you.
Our smartphones and the banking apps we have are incredible devices that allow us to set rules and limits for spending or saving. It has never been easier to setup a standing order to regularly move money to savings pots or “round up” facilities that move your spare change into a rainy-day fund.
At nudge, we believe financial wellbeing is more than simply about a vague commitment at the start of the year or a one-time deal. It is something that lives with us every day. Make commitments that mean when you do treat yourself to a bit of online shopping, you’ve already saved for the month and contributed to your pension.
So, even if you do break your budget one month, don’t see that as an end to your streak. See that as the start to your new streak. Try to beat the previous one. Why can’t you start your next diet on a Wednesday?
Want to know more?
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