January always arrives with a strange emotional weight. After the noise, generosity and spontaneity of December, the first month of the year feels quiet, stretched, and financially demanding. Bank accounts are still recovering from December overspending, debit orders feel heavier than usual, and payday seems impossibly far away.

The truth is that January isn’t a financial crisis, it’s a behavioural one. And once we understand the psychology behind this month, we realise it doesn’t need to be feared. It just needs to be navigated.

Part of January’s emotional toll comes from a shift in how our brains interpret money before and after the holidays. December is full of heightened emotion — excitement, generosity, nostalgia — and these emotional states encourage present bias. We tell ourselves that “it’s just once a year” or “I’ll deal with it next month,” and December-you happily obliges.

Then January arrives, and suddenly the same purchases feel irrational. This isn’t because you made terrible decisions, it’s because January-you and December-you are not operating from the same psychology.

Even though this level of spending on Black Friday and in December isn’t sustainable, it becomes a mental anchor. So when January returns to normal, it feels like a loss. Not because things are worse, but because your reference point shifted.

This is why post-holiday financial stress feels so real, even when the numbers aren’t dramatically different from other months.

Trying to “survive January” as one long block makes the month feel endless. A more behaviourally intelligent approach is to break it into segments, what we call micro-weeks. Instead of planning for the rest of the month, plan only for the next five or seven days. Breaking goals into smaller, manageable units has been shown to significantly reduce anxiety and increase follow-through, because short planning horizons feel more achievable to the brain.

This reframes the experience. Suddenly January is no longer a marathon; it’s a series of short, achievable stretches. The pressure eases, panic reduces, and your sense of control increases.

January is the month where willpower is at its lowest. Routines are restarting, work resumes, schools reopen, and decision fatigue is real. This is exactly when relying on discipline is least effective.

That’s why pre-decisions help so much. When you decide in advance how you’ll behave, you free yourself from daily negotiation. Behavioural researchers have shown that reducing decision fatigue by relying on pre-commitments dramatically improves self-control and financial outcomes.

You might:

• choose one day of the week for grocery shopping
• limit takeaway coffee to a specific day
• set three no-spend days a week
• pre-decide a small, affordable weekly treat

These aren’t rigid rules, they’re calming anchors. They reduce temptation by removing the need for constant decision-making.

Many people try to make January survivable by cutting out all pleasure. Ironically, this backfires. When you experience emotional deprivation, you’re more likely to overspend in February as a rebound.

What works better is replacing expensive joys with low-cost ones. January needs affordable dopamine.

Examples might include:

• a home movie night
• a cheap chocolate or pastry
• a sunset walk
• fresh flowers from a market stall
• a library visit
• a long bath with a candle
• a slow weekend morning with your favourite mug and coffee

These small comforts keep your mood stable and decrease the psychological heaviness of the month, without straining your budget.

Perhaps the most important reminder is that January is not a verdict on your financial discipline. It is a predictable psychological dip after an emotionally charged, financially heavy month. You are not failing; you are adjusting.

If December was a time of emotional generosity, let January be a time of behavioural gentleness. Be curious, not critical. Ask yourself what you might do differently next year, instead of berating yourself for what you didn’t do this time.

With the right behavioural tools, January becomes manageable, even survivable. And by the time February arrives, you’ll look back and realise:

You didn’t just get through the longest month of the year.
You understood it, navigated it, and walked out steadier than before.

• Heuristics and biases in decision making – This was the first post in the series which shares some behavioural economics research. Specifically, the heurstics and biases that influence our relationship with money. It uses System 1 and System 2 thinking examples from Daniel Kahneman’s New York Times best selling book, Thinking Fast and Slow, to help us be more conscious of the workings of our brain. 

• Mirror, mirror, on the wall, stop telling me I’m wonderful – This post focuses on the impact of overconfidence bias in decision making. It introduces the illusion of knowledge bias and the illusion of control bias to illustrate the difference between confidence and carelessness. It also discusses the better than average effect, the self-serving bias and fundamental attribution error. You’ll learn how to confront some unpalatable truths and get out of any false sense of comfort (if you’re up for the challenge?).

• Why you can’t argue with a vegan – Ballsy title, we know. But if you read the post you’ll (hopefully) understand why. We’ll be discussing confirmation bias. It’s one of those psychological biases that you can see everywhere. We’ll also touch on cognitive dissonance theory. We all struggle with these biases. They’re both humorous and serious. But because of that, it’s useful to know how to avoid confirmation bias when you need to.

• Size does matter… when it comes to framing – This post uses framing effect examples to show how framing bias influences the way we interpret information and make decisions. We discuss glossing, the compromise effect, and how the size of the frame can influence the volatility of your investment portfolio.

• Loss aversion vs risk aversion – Once you understand framing, you’re ready for this post. It introduces an incredibly powerful bias known as loss aversion. It also touches on prospect theory, the disposition effect and impression management.

• Anchors pulling you down? – Anchoring bias is a straightforward behavioural bias that causes us to focus on a certain initial value and then make decisions with reference to it. This posts looks at some examples of this anchoring effect.

• The danger of the default – Default options nudge us to make better decisions. The option of opting out also respects freedom of choice. This post unpacks this notion of libertarian paternalism and the perils of status quo bias.

• Regret, it’s not a nice feeling – Regret influences the decisions we make and pushes us to conform to social norms. Examples of regret avoidance show us how this makes complete sense yet no sense at all.

• When the past influences the future – The Concorde effect is a famous example of sunk cost investment. Too often we invest time, money and energy into something we should’ve just abandoned. This post looks at some examples of how sunk cost fallacy affects our human decision processes.

• What’s mine is more valuable – In this post, you’ll learn why you place extra value on things you own. The endowment effect has implications for our investment portfolio, bonuses and consumer behaviour.

• How to improve self-control – Self-control is an essential life skill. It’s what separates humans from the rest of the animal kingdom. Learn how to improve self-control to achieve your long-term goals.

• Procrastination is the enemy of success – We know procrastination is the enemy of success. But while it looks like laziness, it’s often just mental exhaustion at play. Learn how to overcome procrastination.

• The problem with wanting it now – When you delay instant gratification, you will experience long-term satisfaction. It’s the hyperbolic vs exponential discounting debate. Don’t let present bias win!

• The power of first impressions – The order of information influences your decisions. First impressions matter! It’s all got to do with primacy and recency effects.

• We prefer wrong information to no information – Availability bias and survivorship bias influence our decision-making. We make decisions based on the information available to us.

• Learn to deal with uncertainty – Risk and uncertainty will always surround us. Gambler’s Fallacy, the hot-hand effect, the law of small numbers & ambiguity aversion are just some of the biases that arise because of it.

• Stop stereotyping – Representativeness heuristic refers to the fact that we stereotype. It’s a mental shortcut. But beware of making unfounded comparisons.

• Mental accounting – Money is money! Or is it? Mental accounting says we place different values on different money which leads to irrational decision making.

• Money Illusion– Money illusion is a sneaky bias. It causes us to focus on the amount of money in our hands, rather than it’s purchasing power.

• Hone bias– We invest close to home and in what we know. But this lack of diversification results in missed opportunities. Say hello to ‘home bias’.

• Behavioural bias guide for entrepreneurs – We break down 5 common behavioural biases that could be sabotaging your business, with real-world examples!

• Digital Nudging – Discover how digital nudging shapes your choices online. From fintech savings apps to dark patterns in e-commerce – are apps helping you or tricking you?

• Black Friday Survival Tips – Avoid overspending this Black Friday. Discover 7 smart shopping tips to outsmart retail tricks, stick to your budget, and protect your financial wellbeing this holiday season.