Break the Cycle: How to Be in a Better Financial Position This Time Next Year
Do you ever feel like you’re working harder than ever but aren’t seeing the results in your bank account? Another year passes, and while life keeps moving forward, your financial situation stays stuck. You’re making decent money, but it never feels like enough to truly get ahead.
That feeling of being stuck in the same spot year after year can be draining. The regret of missed opportunities, the anxiety of being unprepared, and the fear of wasting more time can weigh on you.
But here’s the truth: You don’t have to stay in this cycle.
Breaking free is possible, and the start of a new year is the perfect time to reset, refocus, and make a fresh start with your finances.
Why Does This Happen?
No Clear Strategy
Without a roadmap, it’s easy to drift through the year without making significant progress. Goals like “save more money” or “spend less” don’t provide the clarity needed to create real change. Without a clear vision of where you want to be financially, it’s hard to make decisions that truly align with your long-term goals.
Overwhelmed by Information
In the age of technology, we’re constantly bombarded with advice from friends, family, social media, and countless online sources. While these insights often come from a place of good intentions, they can be more harmful than helpful. Conflicting advice and ever-changing trends can make it hard to determine the best strategies for your unique situation. This overload of information often leads to either inaction or poor financial decisions.
Lack of Time
When was the last time you sat down and truly focused on your finances? For many, it’s hard to carve out even a small amount of time each week to manage their money. Between work, family, and other obligations, finances often take a back seat. Combined with a lack of financial literacy, it’s easy to see why progress stalls. Without dedicating time or getting an expert to dedicate their time to understanding and planning your finances, it’s nearly impossible to have certainty in achieving a financially free life on your terms.
What’s the Real Cost of Staying Stuck?
The price of staying in the same financial position isn’t just about money, it’s about:
Missed Opportunities: The longer you wait to take control of your finances, the harder it becomes to catch up.
Increased Stress: Financial uncertainty can cause anxiety and impact your overall well-being and relationships.
Delayed Dreams: Whether it’s buying a home, starting a family, going on year holidays, or retiring early — waiting too long to act means pushing these dreams further into the future.
How to Break the Cycle
1. Set Clear, Actionable Financial Goals
The first step to breaking the cycle is getting clear on what you truly want to achieve. Be specific and focus on what matters most to you. When your goals are tied to a sense of purpose and fulfillment, they become more meaningful and easier to stick with. Remember, money isn’t the goal — it’s the vehicle that helps you reach your goals.
A great way to start setting effective goals is by using the SMART-ER framework:
Specific - What is it that you want to achieve?
Measurable - How will you track progress and know you’ve achieved it?
Actionable - Focus on the steps you can take to move forward.
Relevant - Does this goal align with your purpose? How important is it to you?
Time Bound - When is this goal being achieved?
Evaluate - What progress have you made? Assess your progress and adjust as needed.
Reward - What will your reward be when you achieve this goal? Celebrate your wins to keep yourself motivated.
2. Get Clear on Your Cashflow
Your cashflow is the oxygen of your finances. When it’s negative, it can feel like you’re drowning in stress and struggling to breathe. On the other hand, a surplus in cashflow provides freedom and peace of mind.
Start by tracking your income and expenses to identify any “leaks” in your finances — areas where money might be slipping away unnoticed. One common trap is lifestyle inflation, where your spending increases as your income grows, leaving you no better off financially. Take a close look at your expenses and identify areas where you can cut back without sacrificing what truly matters to you.
3. Focus on What You Can Control
While inflation and rising living costs can feel overwhelming, it’s important to shift your focus to what is within your control: earning more and spending less.
Many people underestimate their ability to increase their income. This could involve:
Upskilling to make yourself more valuable to your employer.
Selling unused items for extra cash.
Turning hobbies into a side hustle or freelance opportunity.
By consistently looking for ways to optimise your income and spending, you can take back control of your financial situation, even when external factors are challenging.
4. Have a Plan
A personalised, holistic financial plan is your roadmap to success. It helps you align your daily actions with your long-term goals and ensures that you’re always working towards your future.
A well-rounded plan should cover key areas like managing your cashflow, paying down debt, building savings and investments, protecting yourself with insurance, and preparing for the unexpected. It’s also important to remember that financial planning isn’t one-size-fits-all. Your plan should be tailored to your unique circumstances and updated as your life evolves.
5. Shift Your Mindset and Habits
Even the best plan can fall apart if your mindset and habits aren’t aligned with your goals. Often, it’s our own beliefs and behaviours that hold us back the most.
Identify the thought patterns and limiting beliefs that may be keeping you stuck. Are you avoiding financial decisions out of fear? Do you believe you’ll never get ahead? By recognising and reframing these limiting beliefs, you can create space for growth and new opportunities.
Building positive financial habits, such as mindful spending and consistent saving, creates a ripple effect over time, transforming not only your finances but also your overall relationship with money.
6. Stay Accountable
Accountability is one of the most powerful tools for success. Research shows that you’re 95% more likely to achieve your goals when someone is holding you accountable.
Surround yourself with people who inspire and encourage you, whether it’s a supportive friend, a mentor, or a professional adviser. Seeking help from an expert can provide you with an objective perspective and keep you on track.
Accountability isn’t just about discipline; it’s about creating the highest level of certainty that you’ll achieve a financially free life on your terms.
Make 2025 Your Year of Transformation
Imagine this time next year: your debt is under control, your savings are growing, and the stress about money and your future is a thing of the past. You feel confident, secure, and certain that you’re on the right path to financial freedom, living a life that truly fulfills you.
That version of you is closer than you think — but it all begins with action. Creating the future you want doesn’t require perfection; it requires consistency and the courage to take that first step.
Are you ready to make 2025 the year you break the cycle and take control of your finances?
About the Author
John Cachia is a seasoned financial adviser and dedicated parent of three boys. With a passion for financial literacy and wealth management, John has been in the industry since the young age of 14. His early start in finance has provided him with a wealth of experience and insight, which he now uses to guide families towards achieving their financial goals. As Australia's leading wealth adviser for young families, John is committed to helping parents become positive financial role models for their children, ensuring a secure and prosperous future for the next generation.