While the following content is intended to be educational, it does contain promotional material for Kaldi.

January is here and it comes with all the familiar sense of possibility that a new year brings. Now finally feels like the perfect opportunity to sort out your finances, right? The resolutions are made with all the conviction in the world, and this is the year you'll build that emergency fund or save for the house deposit.

But then something happens. January starts to feel a little… blue. And before you know it, February has come and gone. That initial enthusiasm fades as everyday life reasserts itself, and by March those financial goals – not to mention the gym, ‘love, live, travel mantra’ and all the other New Year’s resolutions feel like a distant memory from someone else's optimistic moment.

Willpower isn’t the problem here as much as it’s the fact that most New Year savings goals are set up to fail from the start. Actually, now we come to think of it, most New Year’s goals are set up to fail. It doesn’t have to be that way, though. With some little tweaks here and there, you can make this year the one that sticks. Especially when it comes to your savings goals.

Be realistic about the numbers

The biggest mistake people often make in January is setting ambitious targets based on how they'd like their finances to look rather than the underlying numbers. Deciding to save £500 per month sounds impressive until you realise your disposable income after all commitments is £300.

Instead, start by looking at your last six months of bank statements to see what you spent on essentials. The gap between your income and baseline spending is what you've got to work with and gives you a realistic goal you can stick with rather than being a little too ambitious and packing it all in by Valentine’s Day.

Momentum is the name of the game

There's something psychologically impressive about keeping a streak going. Saving £50 every single month for twelve months feels more achievable than trying to save £300 for four months before giving up.

Small, consistent amounts also give you time to adjust your spending patterns bit by bit rather than attempting a dramatic lifestyle overhaul that lasts a fortnight. Your brain adapts to having slightly less available each month without it feeling like it’s being deprived.

Apps that automate small savings can work well in these circumstances. For instance, round-ups that take the spare change from every transaction will build up without you necessarily noticing. At Kaldi, we do this by channeling those round-ups into investments without you needing to do a thing, so your money has a chance to grow rather than just sitting in a zero-interest account.

Just remember, when you invest your capital is at risk.

Wait, how does that work?

We’re glad you asked. Every time you make a purchase, the amount is rounded up to the nearest pound. Buy something for £3.40 and 60p automatically goes into your savings. These tiny amounts feel insignificant individually, but over weeks they accumulate into something meaningful. The difference with Kaldi is that spare change is invested rather than saved, giving it the chance to grow over time through low-cost index funds. You're building wealth from purchases you were making anyway. 

Low-cost index funds, you say?

Index funds are baskets of investments that track a particular market, like the FTSE 100 or S&P 500. Instead of trying to pick individual winning stocks, you're buying a tiny slice of hundreds of companies at once. The "low-cost" bit matters because many investment funds often charge hefty management fees that eat into your returns over time. 

Index funds typically charge a fraction of that because they're not actively managed by expensive fund managers trying to beat the market. They just follow it, which historically has proven to be a remarkably effective strategy for long-term growth. Your round-ups might only amount to a few pounds here and there, but invested in these funds rather than sitting idle gives them a fighting chance of growing alongside the broader market.

Make January spending work for you

January is typically a lower-spending month anyway, especially after the December excess of office parties and the Secret Santa you felt socially obligated to join. Most people are naturally pulling back, which makes it a good time to establish positive habits. But you're still spending money on essentials, and getting cashback on these transactions means you're building your savings goal even whilst spending.

A few percent here or there coming back to you on purchases at over 160 retailers might not sound world changing, but it all adds up over a full year. Your weekly food shop generating £2 back becomes £104 annually. That's progress you'd otherwise miss entirely, and it’s why Kaldi lets you automatically channel cashback into investments rather than letting it disappear back into your general spending pot. Again, you’re turning everyday purchases into future wealth without any extra effort.

Separate your goals

Lumping all your money together and hoping you'll have enough left over for savings never usually works. When everything sits in one account, it's too easy to spend without realising you've dipped into money that was meant for your emergency fund.

Create specific pots for your goals. Give them proper names that reflect what they're for, like "Emergency Fund”, which targets, say, £3000. This is more motivating than something vague because you can see in real time how close you are, and you're far less likely to raid it when the purpose it serves is clear.

Account for setbacks without abandoning ship

Sometimes the unexpected will happen, and it disrupts your perfect savings plan. An unplanned expense or that night out that lasted a few hours later than you planned will crop up. Try not to worry about it too much as it’s normal.

The difference between people who achieve their goals and those who don't isn't that the first group never faces obstacles. It's that they don't treat one disrupted month as permission to give up entirely. If you have to pause savings for a month, resume the following month. The goal is direction. Not perfection.

Don't sacrifice everything for saving

Talking of those nights out, if your plan requires you to never see friends or buy anything except absolute essentials, you won't stick to it. Live a little and budget for some enjoyment. The occasional meal out won’t end up being financial sabotage. In fact, it’s often what makes sustained saving possible because you’re not going cold turkey on everything else.

This is also where making your regular spending generate cashback becomes even more valuable. You're still living your life while capturing value back from purchases. It removes the sense that saving requires constant sacrifice.

Make resolution a reality

There’s no need for a superhuman effort or massive income (though obviously the latter would be nice). Where you can win is by setting realistic targets and automating wherever possible. Make your regular spending work harder through actions like cashback and round-ups, and you'll gradually see a real difference as you build the financial buffer you've been wanting.

Just remember, when you invest your capital is at risk. The value of investments can go up or down and you may get back less than you put in. Investing may not be suitable for everyone. Consider your own financial situation and investment goals, and seek independent financial advice if needed.

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