5 Common January Money Mistakes That Quietly Set People Back All Year
Written by
Cindy Lamothe
Edited by
Rebekah Evans
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January has that fresh start energy — we’re motivated, optimistic and fully convinced this is the year we get our finances together. But between goal-setting, post-holiday reality checks and a few well-intentioned decisions, it’s surprisingly easy to slip into money habits that feel harmless in the moment and quietly make the rest of the year harder than it needs to be.
“People repeat the same financial behaviors every January and call it a fresh start,” said Angela Matthews, personal finance expert and founder and CEO of The Happy Investor Method. “However, if nothing changes structurally, nothing changes financially.”
Before those small January choices snowball, here’s a look at the most common money mistakes people make at the start of the year — and how to avoid them.
Letting Cash Drift
Matthews referred to this error as treating cash as “safe” instead of intentional.
What people do wrong in January: They let cash sit in checking or savings with no clear purpose, assuming liquidity equals safety.
Why it sets them back: Unassigned cash quietly loses value to inflation and isn’t available when real opportunities or obligations arise later in the year.
What to do instead: “High-income households decide early what cash is actually for. Some cash stays liquid for taxes or emergencies, some is earmarked for known expenses and some is designated as opportunity capital. Cash shouldn’t just sit — it should have a job,” Matthews explained.
See Next: 6 Things You Must Do WhenYour Savings Reach $50,000
Setting-and-Forgetting Retirement
Leaving contributions on autopilot is another no no, according to Matthews. And according to Newsweek, there’s been a retirement warning issued to millions of middle-aged Americans.
What people do wrong in January: They keep the same retirement allocations year after year without reassessing whether they still make sense.
Why it sets them back: Market conditions, economic cycles and personal goals change — but their investments don’t.
What to do instead: “Early in the year is the right time to reassess where retirement dollars are actually going — not to time the market, but to make sure long-term money reflects current realities rather than last year’s assumptions,” Matthews said.
Being Opportunity-Unready
Most people don’t realize they make this one, but Matthews noticed it’s a big mistake: Scrambling for capital when chances appear.
What people do wrong in January: They don’t plan for future investments until something attractive shows up — then they’re forced to pass or liquidate poorly.
Why it sets them back: Good opportunities often require fast, confident decisions and unprepared investors miss them.
What to do instead: “Households with long-term success prepare capital before opportunities appear. They identify what types of investments they want exposure to and position cash early so they can say yes from readiness, not panic,” Matthews said.
Chasing Net Worth, Ignoring Cash Flow
This, according to Matthews, involves focusing on balances instead of money movement.
What people do wrong in January: They obsess over account balances but ignore how money will actually move throughout the year.
Why it sets them back: Illiquid or non-income-producing assets can create stress even when net worth looks strong.
What to do instead: “Wealth isn’t just about accumulation — it’s about structure. Starting the year by evaluating which assets can generate income now versus later creates flexibility, stability and optionality throughout the year,” Matthews explained.
Procrastinating on Taxes
Waiting until December to think about tax strategy is another problematic money move, said Matthews.
What people do wrong in January: They ignore tax planning until year-end, when most meaningful options are already gone.
Why it sets them back: Reactive tax planning limits flexibility and often results in higher tax bills or missed advantages.
What to do instead: “January and February are when control happens. Retirement contributions, Roth strategies and projected tax liability should be mapped early so adjustments can be made throughout the year instead of rushed at the end,” Matthews added.
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