Blue Monday is nothing new. After all, New Order were singing about it (sort of) in their 1983 hit of the same name. But if UK post-punk, synth rock wasn’t your thing, you’ll have experienced similar feelings, be it post-vacation blues or simply that Monday morning feeling. When it comes to personal finances, January can be a month when the festive adrenaline eases and your own economic reality hits home. The cure lies in forward-thinking, positive mindset and goal setting.

Officially, Blue Monday is the third Monday of January and is considered the saddest day of the year, supposedly based on an “equation” that factors in weather conditions, debt levels, time since Christmas, time since new year’s resolutions have been broken, low motivational levels, and the feeling of a need to take action1. Skeptics view it more as a marketing gimmick dreamed up by a travel company (Sky Travel in 2005) to help sell winter vacations. Whatever your view, most of us can relate to looking at depleted accounts and maxed out credit cards after all the gift-giving and partying and feeling your heart sink.

Turn that frown upside down

This year brings certain economic challenges. Interest rates remain high, at least compared to recent years, and inflation, while cooling, has impacted household bills. Talk is rife of recessions, economic slowdowns, and household debt. According to a recent poll by Ipsos, conducted for Global News2, two-thirds (66 percent) of the Canadian population is concerned that they will have to delay future plans like buying a home or starting a family because of their financial situation. Over half (53 percent) of Canadians say they plan to cut back on eating out and 45 percent say they will spend less on entertainment. Whether it’s on Blue Monday itself or just a general January money hangover, overcoming this time of year requires a change in mindset.

The first thing, as hard as it might be, is to wake up, smell the coffee and face your situation head on, whether that’s paying off debt, having less to invest or scaling down vacation plans. Prioritize debt repayments and highlight those overlooked expenses that caught you by surprise this year. You can’t change the past, of course, but it will stand you in better stead next time. Essentially, get on top of the painful aspects of your future budget – this gives you a sense of control as you look to the future.

Money is emotional, no matter how much of it you’ve got, so while January can be a financial gut-punch, be kind to yourself. Remember past achievements – maybe 2023 was a good investment year for you or maybe you managed to put more than expected into your kids’ RESPs. Remember, too, that you’re not the only one in the Blue Monday boat. Focus on how much you will be able to save or do in the year ahead and enjoy the planning process. Talk it through with supportive family or friends. Financial resets are hard but it’s also exciting to think about what you can achieve.

Setting goals

Some ground rules before you start.

• Be inspired – don’t lose sight of what’s important to you, whether that’s a vacation or a major purchase or a dream retirement.

• Rein in extreme ideas – that two-year plan to buy a luxury yacht may need to be reworked. That said, be courageous. Start small and build to bigger goals. Effective goal setting is the key to financial wins and building wealth.

• Write it down, or use a spreadsheet obviously. A simple but crucial part of goal setting is clarity. Keeping a record will help you track progress, amend things easily, and tick of goals when you’ve achieved them.

• Stay disciplined. An additional approach might be to break your goals down into short-, medium- and long-term objectives to prevent you getting overwhelmed. A useful framework is to think SMART and make sure every piece of the plan is: Specific; Measurable; Achievable; Realistic; and Time-bound. These will help determine what’s doable and, importantly, what adjustments need to be made to make it doable.

Here are some goal-setting examples:

Make a budget

Set out your principles to guide your financial year. Use it to check and stay on track, preventing overspending and under saving. A popular approach is the 50/30/20 budgeting approach, which allocates 50% of your income toward needs, 30% toward wants and 20% toward savings and debt repayment.

Pay off that debt

Speaking of debt, high interest debt is a major drag on a family’s financial progress so deal with credit cards or loans first and then turn your attention to lower-rate debt like student loans or a mortgage.

(Re)Build your emergency fund

A good cash buffer fits into the needs category and is worth extra attention amid the present economic climate. Opinions are varied over how much you need but enough to cover essentials for a few months is a solid goal. If that’s not possible straight away, start with smaller targets and build up your reserves. An emergency fund obviously has practical advantages but don’t overlook the emotional value of giving yourself a financial safety net. Other examples of short- to medium term goals might include saving for a vacation; paying for a renovation; saving for an engagement ring; and saving for a house down-payment.

Saving for retirement

Long-term investing goals are easy to put off but the sooner you put money to work the better. Timing the market is a fool’s game (who predicted 20%+ returns for the S&P in 2023?) so allocate funds to retirement savings and let the power of compounding take over. Failure to do so with your registered accounts also means you miss out on significant tax deferrals and tax-free growth. If your employer offers a defined contribution plan and matches contributions, jump on it or risk missing out on free money. Other long-term goals might include paying for your kid’s education (RESP), launching your own business or travelling for an extended period.

As New Order sang on their Blue Monday song, “How does it feel?” Well, when it comes to your finances, with self-reflection, a positive mindset and robust, realistic goals, you can overcome the January money hangover and put you and your family on track for success in 2024 and beyond.


1 https://en.wikipedia.org/wiki/Blue_Monday_(date)

2 https://globalnews.ca/news/10192147/financial-planning-2024-inflation/