After the holiday frenzy of buying gifts, dining out, and indulging in festive treats, January often comes with a sobering reality: credit card bills and dwindling savings. Sound familiar? If so, a 'Financial Dry Jan' might be just what you need.
January is a time for fresh starts and new resolutions, but it's also a good time to detox your body and wallet. While many people love the idea of a "Dry January" to give their bodies a break from booze, why not try a "Financial Dry Jan" to reset their spending and boost their financial wellbeing?
This financial detox is essential because, now more than ever, it's time to reset and refocus on your financial wellbeing and to redirect onto a new, healthier path. Now, let's see how Financial Dry Jan can change your financial life positively and lay a strong foundation for long-term financial wellness.
Assess Your Spending Habits
The first step to this detox is understanding where your money goes and the differences between ‘wants’ and ‘needs’. With the new year comes a renewal of goals for so many, but this usually unmasks blind spots regarding our money, too. Take a moment in Financial Dry Jan, streamline your monthly spending, and highlight areas that could bear some cutback; little changes you will make to your spending habits reap significant savings in the long run.
Small stones start an avalanche.
Tip:
Use a budgeting app or simple spreadsheet to track your purchases so you can see where you might cut back.
Tailor Your Financial Dry Jan to Your Situation
Not everyone starts their financial journey from the same place. Whether you're working to pay off debt, building an emergency fund, or already saving and investing, your Financial Dry Jan can be customised to meet your needs:
For Those with Debt:
Focus on identifying high-interest debts, such as credit cards, and prioritise paying them down.
You can use the "avalanche method" (paying off debts with the highest interest rate first) or the "snowball method" (starting with the smallest debt for quick wins).
For Those with Limited Income:
Small changes can have a significant impact. Look for everyday savings, such as reducing takeaways or shopping for generic brands.
Redirect those funds toward your essential expenses or emergency savings.
Allocate savings towards investments at the start of each month. Speak to a financial advisor to understand how much would be appropriate.
For Those with Established Savings:
Consider how you can make your money work harder.
To optimise growth, review your investment portfolio or explore options such as low-cost ETFs, mutual funds, or alternative investments in trade and invoice financing.
Tip:
No matter your starting point, tracking your progress every week will help you stay motivated and adjust your plan as needed.
Focus on Financial Wellness, Not Instant Gratification
Just as Dry January helps break the habit of impulse drinking, a Financial Dry Jan helps you to focus on the big picture, not short-term desires. January is a great time to change your mindset and make long-term financial wellness more important than immediate gratification. You want to create a financial plan that will work for you over the coming years, not just a quick fix.
The best time to make a change was when you last considered it. The next best time is now.
Tip:
These financial goals should be realistic and deal with long-term financial wellbeing, be it saving for a rainy day or setting up an emergency fund
Kick Unwanted Subscriptions and Expenses
During Financial Dry Jan, review your subscriptions and cancel or pause subscriptions and services that are not needed. Various streaming services and monthly memberships were started impulsively without adding significant value to the financial wellness of the subscriber.
According to a recent survey by Finder, the average person in Dubai spends AED 2800 annually on unused subscription services. Identifying and cancelling these could instantly free up funds for more meaningful financial goals, such as buying your next investment property, planning your child’s education, or retirement.
What subscriptions could you cancel today to save AED50, AED100, or even AED150 this month?
Tip:
Cancel all subscriptions that you don't use. Then, put the money toward savings or investments that are important to you.
Save More, Spend Less
One of the most meaningful parts of Financial Dry Jan is reevaluating your relationship with money. Instead of spending more money on your ‘wants’ than your ‘needs’, i.e. things you don't really need, why not put it to use better? Whether you're saving for a vacation, an emergency fund, or long-term retirement goals, setting aside even a small amount each month can significantly impact your financial wellness.
Classifying your financial planning, savings and investments within your ‘needs’ will ensure that you prioritise the proper spending and leave room for the ‘wants’ within your budget.
Tip:
Speak to a financial advisor to find and open a savings account that suits your needs, grow your savings, and start building that financial safety net.
Overcome Emotional Spending
Spending isn’t always about buying what we ‘need’ or ‘want’; it’s often tied to how we feel. Many clients I have met over the years used to overspend due to stress, boredom, or even trying to keep up appearances. Living in the Middle East can seem like the land of luxury, but when we overspend to “keep up with the Jones’, it can be a slippery slope of spending. Emotional spending may offer short-term relief, but it often derails financial goals in the long run.
Recognising these emotional triggers is the first step in breaking the cycle. For instance, if you tend to shop when you're stressed, consider healthier alternatives like exercising, journaling, or meditating. Similarly, setting spending limits or giving yourself a “cooling-off period” before making non-essential purchases can help reduce impulsive decisions.
Tip:
When you feel the urge to splurge, ask yourself: “Am I buying this because I need it or because I’m bored or stressed?” Delaying the purchase by 24 hours often provides the clarity you need.
Make Your Money Work for You
Saving is just the beginning. To truly boost your financial wellbeing, consider how you can grow your money through intelligent investments. Investing allows your savings to work harder, helping you achieve long-term financial goals like retirement, buying a buy-to-let property, or funding your child’s education.
One of the simplest ways to start is by exploring low-cost index funds or ETFs, which provide diversified exposure to equity markets while keeping fees low. If you're new to investing, understanding the power of compound interest is essential. This is when your returns start earning returns, creating exponential growth over time.
Tip:
Speak to a financial advisor to set up an investment account and automate monthly contributions. Choose investment options suited to your goals and risk tolerance.
Stay Accountable and Celebrate Progress
Making financial changes can be challenging, but it is easier with a support system. Sharing your goals and progress with a trusted friend or family member will help you stay motivated. As cheesy as it sounds, a “financial detox buddy” can join you in a Financial Dry Jan or simply act as a source of accountability, celebrating your wins and keeping you on track.
However, accountability doesn’t have to be public if you prefer privacy. Personal reminders, documenting your progress, or setting up regular check-ins with yourself can also help. Celebrate milestones along the way, whether it’s cancelling unused subscriptions, saving an extra AED500, or hitting a SMART goal. Recognising your progress keeps you motivated to stick to the plan.
Tip:
Partner with someone who shares your financial goals and check in weekly to discuss your progress. Alternatively, create a personal reward system in which you treat yourself in small, budget-friendly ways to meet key milestones.
Reflect on Financial Goals for the Year Ahead
Financial Dry Jan is a perfect time to stop and reflect on your financial situation. Is your current plan working? Are you saving enough? Are you on track? Are you adjusting your budget, investments, or savings? By reviewing your finances in January, you'll set yourself up for a better financial year.
Setting financial goals is key to long-term success, and using the SMART approach makes it easier to stay on track. SMART goals are:
Specific
Measurable
Achievable
Relevant
Time-bound
For example, instead of saying, “I want to save money,” you could set a goal like: “I will save AED24,000 this year by putting aside AED2000 every month.” This goal is clear, easy to measure, realistic for many budgets, and has a deadline to motivate you. Breaking your goals into simple, actionable steps helps you stay focused and feel accomplished as you progress.
Hint:
Try to write down your financial goals and plan how to achieve them. Whether debt settlement or increasing savings, a well-defined goal helps to hold onto motivation more effectively.
Start the Year with Financial Wellness
Financial Dry Jan is all about making wiser choices that benefit you in the future. Now, bring all attention to your financial wellbeing so that it may last long through the year for lasting financial wellness. Think of this detox as a way to improve your financial habits and put yourself on the right track to achieve goals.
Contact Us
At My Intelligent Advisor, we can help you boost your financial wellbeing. From intelligent investment strategies to custom financial planning, we can support your journey.
Get in Touch Today:
📞 Call Us: 00971 (0) 58 577 2265
📧 Email Us: info@myintelligentinvestor.com
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Looking for more help or guidance? Check out our other insights for expert tips and advice that may be helpful on your financial journey.
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