You Signed Up for the Gym Last January Too
Motivation fades. Systems do not.
My friends in the personal fitness training industry have mixed feelings every year as January of the new year starts. More people will sign up for gym memberships and personal trainer packages in January.
They estimate about a 50% increase compared to other months. The gym does get crowded in January. It can be difficult at times to move around easily, and I often have to wait a bit more than usual.
Patience and persistence are often rewarded as the year goes on. My friends in the industry estimate gym attendance drops by half within six months. Many new faces I see in the first 3 months are no longer there by May or June.
Business is good at the start of the year. Calendars are full. Trainers have no time for personal events. Personal training bookings taper off significantly as the year goes on.
January is often when people want to proceed with their New Year resolutions, start a new hobby, kick a bad habit or begin a personal savings/investment program.
Fresh Start Effect
Dai, Milkman, and Riis published their research on the fresh start effect in 2014.They coined the term “fresh start effect.” Temporal landmarks feel like new beginnings. These help people let go of past failures and start again. January of the New Year is often a popular starting point for a fresh start.
Their research found that Google searches for “diet” peak on January 1. Gym attendance rises after birthdays. Saving and investment activity increases at the start of new weeks, months, and academic terms.
These moments feel like resets. People draw a clear line between past and future. When that line appears, they plan ahead. Money decisions change because people believe they are starting over.
In a later review, Hengchen Dai and Li explain the limits of fresh starts in “How experiencing and anticipating temporal landmarks influence motivation (Current Opinion in Psychology, 2019).”
They show that fresh starts raise motivation but also encourage delay, overconfidence, and fading effort. These dynamics carry over to money decisions.
The Dark Side of the Fresh Start
A consistent phrase I hear in November and December is “Let us revisit this in the New Year.”
It sounds like planning. It feels like prudence and being careful with one’s assets. But it might not be either of those.
There are things that people want to do but still put off till January.
Examples include rebalancing their portfolios, trimming a position that has grown large compared to total holdings or increasing allocation to a theme that they believe that might do well.
“I will sort this out in January” becomes permission to do nothing in December.
Research co-authored by NUS Business School’s Ke Michael Mai shows how fresh starts can backfire. “I will start after New Year” becomes an excuse. Effort drops before the reset arrives.
Your future self becomes a convenient excuse.
Procrastination becomes disguised as planning. It is not a situation when one is waiting for more information. The waiting becomes focused on a date on the calendar that has no connection to what one has to do.
January Resets People. Not Markets.
The January effect is the idea that stock prices rise more in January than in other months. This is often linked to year-end tax selling and portfolio resets. If it were real and persistent, it would be an exploitable calendar anomaly.
In Singapore, it does not hold up. In their article “The Disappearing Calendar Anomalies in the Singapore Stock Market” (2006), Wing-Keung Wong, Amit Agarwal, and Ngee-Tiong Wong show that calendar effects like the January effect weaken or disappear once investors come to expect them.
That does not mean markets are perfectly efficient.
It means they adapt. Temporary patterns can appear when behavior clusters. They fade once people try to trade them.
January resets people. It does not reset markets.
Structure Beats Willpower.
2017 Nobel Prize winner Richard Thaler and behavioral finance scholar Hersh Shefrin describe behavior as a struggle between two selves in their paper An Economic Theory of Self-Control. The Planner thinks long term and wants to save and invest. The Doer wants comfort now.
Fresh starts can briefly empower the Planner, but willpower fades and the Doer eventually takes over. That is why motivation alone fails. Structure decides the outcome.
The OECD (Organisation for Economic Co-operation and Development) highlighted that good policies account for how people actually behave, not how they should behave.
Singapore’s CPF (Central Provident Fund) system understood this decades ago. The system does not rely on motivation.
CPF is Singapore’s mandatory defined-contribution retirement scheme for most citizens and permanent residents. Employees contribute up to 20% of wages. Employers add up to 17%. Contributions are automatic.
It also splits savings into clear buckets. Ordinary Account is for housing. Special Account is for retirement. MediSave is for healthcare. The structure removes choice at the wrong moments and forces long-term discipline.
People do not need to feel motivated every month. They do not need a fresh start in January. The system works because it makes the optimum behavior the default.
CPF is not about nudging people to save. There is no nudging about it. Employers must deduct the salaries first and do matching payments. All this is mandatory and legislated. It is about designing a system where saving happens whether people feel like it or not.
Make It Automatic
The fresh start effect is a tool. It can work for or against people.
It can work against someone when it causes one to delay December decisions or end of year decisions to January. Ambitious goals without systems and using pure willpower to push through objectives can make challenging tasks even harder.
The fresh start effect can help when it uses this week’s motivation to build systems that run without motivation. The key difference is design over intelligence.
Examples might be looking to increase monthly investment amount automatically. This makes things easier rather than looking to “invest more in the future”. One is fixed and systematic. The other is just a statement of intent.
Bestselling author of the book The Psychology of Money, Morgan Housel wrote that reasonable beats rational. An imperfect system that a person follows is much better than a perfect plan but has no follow through.
A 5% automatic increase to your monthly investment each year, starting this week, beats a 15% increase that never begins.
Systems matter more than motivation.
January motivation is a loan. February collects.
This article is for educational purposes only and does not constitute financial advice. Please consult a qualified professional before making investment decisions.