From financial stress to financial wellness: Start fresh this year

As the calendar resets from the last day to the first day of a month, something interesting happens to our brains. It's what behavioural economics calls the "fresh start effect." This is a phenomenon that causes us to see new beginnings as motivators to challenge ourselves, to set goals, and to achieve those goals.

Whether it's a new month, a milestone, or simply the right time for change, you can use this powerful effect to take control of your financial health.

What is the fresh start effect?

The fresh start effect refers to the way our minds distinguish certain moments in time that feel different from the everyday. These moments, known as temporal landmarks, can be things like birthdays, anniversaries, and the start of a new month or year.

Occasions like these give us the feeling of new beginnings and fresh starts, and they motivate us to reflect, set goals, and make positive changes in our lives. When it comes to financial planning, fresh start framing not only encourages greater commitment to personal goals, but research shows that this outlook can also lead to increased retirement savings.

Why is the start of the year the best time to focus on financial wellness?

Financial stress is a common reality at the start of a new year, especially after the festive season's expenses. It's a time when budgets often feel stretched, and unexpected costs such as annual increases on gym memberships, insurance policies, and mobile contracts can put extra pressure on your cash flow.

But a new year also brings a fresh start. It's an opportunity to:

• Reflect on our spending habits from the past year.
• Align our finances with our life goals.
• Plan how to make the coming year financially successful.

It's the perfect time to turn financial stress into financial empowerment. Here are five ways to start the year strong.

1. Map out your major expenses

   Consider what significant expenses might lie ahead for you this year and beyond. Are you thinking of starting a business or relocating? Are you looking to buy a house? Will you be paying for your child's education in 2026, or even planning an international trip?

   It's important to "do the math" - find out estimate costs, calculate how much you need to save every month, and consider tax-efficient ways to meet your goals. If education is one of your major expenses, Discovery's Global Education Protector (GEP) is a product worth considering. It offers financial protection for school and university fees, ensuring your child's education continues uninterrupted - even in the event of death or disability. Incorporating tools like GEP into your financial plan can provide both peace of mind and a practical solution to one of life's biggest investments.

2. Try tuck away a little extra to retire well

   When was the last time you checked whether your long-term financial goals align with your current retirement contributions? Are you able to contribute even a little more each month?

   Particularly when it comes to retirement savings, even the smallest adjustment in your financial behaviour can compound over time and significant improve your financial security over time.

3. Relook your discretionary investments

   Keep in mind that your investment portfolio should adapt to constantly-fluctuating markets. Use the fresh start effect to your advantage by taking this time to evaluate your discretionary benefits. Are they still in line with your appetite for risk and financial objectives? If not, then now's the time to rebalance your portfolio.

4. Get personalised and professional advice

   Whether it's optimising your retirement contributions or finding investment opportunities that are well-suited to you, expert advice is an invaluable resource. A financial adviser can give you a well-researched and realistic idea of where you are, financially, and what it will take to get to where you want to be!

   Their more objective approach and insights into your financial situation will be followed up by actionable steps to help you reach your goals in a specified time frame. If you don't yet have a financial adviser, click here to have one call you back.

5. Learn how become more money-savvy

   Knowledge is power, and the financial literacy you acquire now will pay dividends later. Healthy Company offers comprehensive financial wellness courses that are carefully curated to help employees make smarter financial decisions.

   Courses like these don't take long (relative to the value they provide) and can usually be completed conveniently online. They can also help you ask your financial adviser more informed questions, and better understand their suggested strategies to achieve your financial goals.

Turn financial stress into financial success

Want to use the fresh start effect to tackle your financial goals? You don't need to wait for the next milestone - let this be your nudge to take a step towards securing your financial wellness today.