Financial Habits You Can Adopt For A New Year
It’s a whole new year, which means it’s time for some brand new resolutions, the kind we swear we’ll stick to this time.
However, one of the most common (and recurring) New Year’s resolutions is to make better financial decisions.
Whether it’s saving more, spending less, or finally figuring out where your money disappears to every month, money goals are often right at the top of most people’s lists. And while the motivation usually starts strong in January, it tends to fade once real life and real expenses kick in.
The good news? Improving your finances doesn’t have to mean extreme budgeting or cutting out everything you enjoy. It starts with a few realistic habits that are easier to maintain all year long.
Always put savings first (and maybe make it work for you)
You might have heard this one before, but it cannot be overstated how important savings are in today’s rocky economic climate.
After paying off your bills for the month, take stock of what’s left — yes, even if the number feels a little underwhelming — and move it into your savings before spending on non-essentials. This simple habit helps prevent “accidental” overspending.
A good number of Malaysian banks offer automated savings plans that can help you plan out your budget and money management journey. When saving happens automatically, you’re far less likely to skip it.
Additionally, if you are comfortable with your current savings, you could try setting aside a portion of it for investments. Investing is typically a slow burn, and you likely won’t see any big profits for years. However, if you start investing early and dedicate a small portion of your savings to it every month, you may find yourself with a decent profit down the line.
Stick to that budget (even if it gets hard)
Speaking of money management, it’s fairly easy to plan out a budget. Sticking to it is the real challenge. Unexpected costs may sneak up on you, or you may lose track of your spending halfway through the month.
If this sounds familiar, you’re not alone. Budgeting is a skill, and like any skill, it takes practice.
If you need help, here are a few simple steps to get you started on your budget plan:
- Identify a goal
- Track your spending and calculate your income
- Plan out how much needs to be saved each month to achieve your goals, based on income and expenditure
Alternatively, you could try the 50/30/20 rule, as explained by the EPF. This is a straightforward method, separating your income into 50% for necessities, 30% for commitments or wants, and 20% for savings.
While it may not be the most detailed budgeting method, it’s a simple and reliable way to manage daily expenses while still building a savings cushion in the background.
The vacation fund (yes, really)
Surprised? When it comes to improving your finances, having an emergency fund to cushion unexpected costs is a no-brainer. But what people often forget is that predictable expenses deserve a plan too.
Being on a budget doesn’t mean vacations or non-essentials are off-limits. It simply means they’re planned for — and paid for — ahead of time.
Vacations are usually planned months in advance anyway, so why not include them in your budgeting goals? This allows you to adjust your spending gradually instead of relying on last-minute credit card swipes.
Strategise your debt
Paying off your debts is one of the fastest ways to achieve financial freedom — especially when it comes to credit card debt.
According to a CTOS report, two-thirds of Malaysian consumers own a credit card, with an average outstanding balance of RM11,955 per person. When combined with rising living costs and high interest rates, this can quickly become overwhelming.
And this is even before factoring in your card’s annual percentage rate (APR).
The key is not to panic, but to pick a repayment strategy and stick to it. Popular methods include the debt avalanche and debt snowball strategies.
For example, the debt avalanche strategy involves listing out all your current debts from highest to lowest interest rates. You continue paying the minimum on all debts, while putting any extra money toward the highest-interest debt first. Once that’s cleared, you roll that full payment amount onto the next highest-interest debt.
This method starts off slow and requires discipline, but those who stick with it will end up paying significantly less interest in the long run.
Alternatively, you could try consolidating your credit card debt by taking out a personal loan. If you do a little research, it is entirely possible to find a personal loan with a favourable interest rate. You can then use such a loan to immediately pay off all credit card debt, leaving you with just one debt to worry about. This can make things more manageable, and if you play your cards right, leave you with much less interest to pay.
Progress over perfection
At the end of the day, improving your finances isn’t about being perfect or cutting out every small joy in your life. It’s about making intentional choices that work with your lifestyle, not against it.
Whether it’s prioritising savings, sticking to a realistic budget, planning ahead for both emergencies and holidays, or finally tackling lingering debt, small, consistent steps add up faster than you think.
You don’t need a total financial overhaul to start the year right, just a plan you can realistically stick to. And if you fall off track? Adjust, reset, and keep going. Financial progress isn’t built in January alone — it’s made month by month.
