How you frame your resolutions is crucial to your likelihood of achieving them.
People “with approach-oriented goals were significantly more successful in sustaining their New Year’s resolutions compared to those with avoidance-oriented goals,” according to one study by a professor of psychology at Stockholm University, Sweden, and others. So, come up with goals about what you want to achieve rather than something you wish to avoid.
Think: I will build an emergency fund, rather than: I want to avoid a financial crunch.
Another key is to start with a small step.
“You can’t just randomly, on 1 January, change yourself,” said Krishna Rath, a Bhubaneshwar-based registered investment adviser with the Securities and Exchange Board of India (Sebi). If you keep too big a target, it can create a mental block.
“Never attempt to go the whole hog immediately. It will be challenging and daunting,” said Steven Nelson Fernandes, a Sebi-registered investment adviser and founder of Proficient Financial Planners in Thane.
As an example: “If you have not been saving at all, start with a 5% to 10% savings,” said Fernandes. After a few months, see if you can increase that amount and build up a habit.
With these framing tips in mind, here are resolutions to help improve your finances this year:
Reassess or set financial goals
If you have a financial plan, review your progress toward achieving your goals and identify any adjustments needed.
If you don’t have a financial plan, or don’t have a clear idea of a budget or investments, or whether you’re saving enough money, or whether you have adequate insurance, then get started!
Mark one weekend in the coming weeks on your calendar to dedicate time to sort through your financial life. Make a list of all the bank accounts, insurance and investment products that you have, debts that you need to pay and so on, either on paper or on an excel sheet. Make a budget.
Prepare your financial plans, either on your own or with the help of a trustworthy financial adviser. Such a plan is needed to build financial blocks to fund your lifestyle now and post-retirement.
One caution when setting goals is to consider your needs and wants. Just because your neighbour has purchased a big house, it doesn’t mean you need to buy a bigger house, said Fernandes. “Set realistic goals,” he said.
To save more: automate
If one of your resolutions is to save more, automate the savings so it takes away the risk of the money getting spent ahead of the goal’s achievement.
If your salary is deposited into your bank account on the 1st of the month, set up an auto-transfer on the 2nd or 3rd. “SIPs (systematic investment plans) are a good way of disciplined savings,” said Fernandes. For long-term savings, advisers typically suggest a SIP for an equity mutual fund.
If you’re looking to save for a short-term goal, say for an upcoming holiday in nine months, you could set up a recurring fixed deposit for eight months, which transfers the money automatically a day after your salary comes.
If you already have a SIP, aim to increase the amount, especially as your income goes up. “Then you see the magic of this step-up, along with compounding,” said Pankaj Mathpal, founder of Optima Money, a registered mutual fund distributor in Mumbai.
Secondly, Mathpal said: “Align your goals with your savings.”
If you’re saving for a specific goal, like a child’s education, it acts as a psychological barrier to withdrawing that money for other purposes.
A strategy to tackle the spending itch
If one of the things you want to change is to cut back on wasteful spending, rather than setting a draconian curb on spending (which may be hard to follow), consider using some strategies that make it harder to spend.
First, figure out what you’re overspending on. We look for big-ticket items, but often it’s the smaller expenses that add up to sizable amounts, said Rath.
For one month, write down, on a piece of paper or in an excel sheet, how much you spent every day and on what. At the end of the month, just add up the expenses. If it’s more than one-third of your income, “try to find out where you are spending the smaller amounts of money,” said Rath.
One typical culprit, he said, is subscriptions. These could be for entertainment, food delivery and artificial intelligence or cloud platforms. “ ₹10,000 -15,000 today is going in random subscriptions that you don’t require,” said Rath. Stop those that aren’t in use.
If your issue is impulse buying, limit the amount of money that is available in your UPI account, or set a lower spending limit on your debit/credit card. Alternatively, make it a point to pay cash to buy anything that costs above a certain amount, say ₹10,000.
“When you have cash, you feel the pain of paying; with cards, you don’t feel it,” said Fernandes.
Another idea is to apply a 24-hour rule. Take 24 hours to think about whether you really need to buy an item. You can enlist a partner or friend, whom you can call every time a big purchase is about to happen.
Resolve to lower debt
“In this year, everybody should make a resolution that they should not have credit card debt,” said Rath.
This is not only because it carries the highest interest rate among various types of debt, but also because missing a payment can quickly negatively impact your credit score.
Resolve to use your bonus, or any other funds coming your way, to pay off debt, especially high-interest loans like personal loans, or to prepay an existing large home loan so you can be debt-free sooner.
For one thing, as people get older, they’ll have other expenses to tackle, such as rising education costs for children, so not having an EMI to worry about at that time is a boon. Also, you don’t want debt in case you lose your job.
On the flip side, don’t compromise on your long-term savings corpus to pay off debt.
Mathpal said some of his clients are considering selling their long-term SIP investments to prepay their home loan this year, as stocks haven’t performed well. “When the market is doing well, nobody says that,” he said.
So long as your overall debt or loan is within your means, say less than 30% of your income, you should continue your SIPs as usual.
If you don’t have huge debt liabilities, resolve to be prompt in paying all your bills, and thus boost your credit score which can be useful in the future.
On investments—say no to FOMO
The lacklustre equity returns of 2025 have disappointed some investors, but that doesn’t mean that you should go chasing new investments that are offering high returns.
For instance, many investors have been wondering if they should buy gold, which rose more than 70% in the domestic market in 2025. Advisers say it would be a mistake to buy it now thinking that the same will be repeated in 2026. However, if you take this as a learning and want to include gold in your long-term portfolio, then decide a certain portion of your investment portfolio that you will allocate to it, and stick to that, said Mathpal. “Add it in a staggered manner,” he said and be mentally prepared to hold it for the long-term.
Investors are also looking at other exotic investments. Rath said clients are talking about gold-linked debentures, guaranteed debt investments that pay 14% interest rate, or property in Dubai. But these carry unique risks which may not be fully disclosed or understood.
Always remember: financial professionals, be they advisers, your banker, insurance agent, and even social media influencers are out there to make money, typically when they sell you a product. Therefore, understand how they will benefit from your investment.
Don’t let the fear of missing out or FOMO land you in a strategy that ends up making you miss out on your long term goals.
“Don’t blindly follow the trend,” said Rath. “Stick to your financial plan.”
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