Well what a start to the New Year! It looks like it’s going to be another difficult one for peoples’ finances with many either losing their jobs or earning much less than they are used to. On a positive note, we’re spending less as we can’t socialise and don’t have to commute so there has never been a better time to focus on your finances. Make the most of your money with these 10 New Year money resolutions.
Tackle credit card debt
First and foremost, if you have debt and you want to pay it off start paying off the cards or loans with the highest interest rate first. The average household debt for a UK family is £9,681 according to Experian which said it was £2k lower in June than it was at the start of the last lockdown in March.
Improve your credit score
Good credit scores can save you money in more ways than you may realize. Want to get lower insurance premiums, lower interest rates, lower deposits, and lower monthly payments? Good credit is the key to potentially unlocking all these money-saving perks.
Start an emergency fund
Who else used their emergency fund in 2020? Mine helped me out of a big hole last year when my business lost money due to the Coronavirus Pandemic and I needed to pay for repairs to my van. Most financial experts recommend that you have somewhere between three months and six months of basic living expenses in your emergency fund. which isn’t always achievable, so just have as much as you can.
Refresh your budget
Having a budget isn’t boring – it frees up money to not have to worry so much about finances and to do fun stuff! Paying less on my household bills means I can enjoy a takeaway with my daughter from time to time.
Ditch unhealthy habits to save £££s
If you need an added incentive to giving up smoking or drinking then work out how much you could save over the month – it could be around £300.
Don’t just save, invest!
If you’ve never had the means to invest before it can feel scary to dip your toe into the water for the first time, which is why I recommend asking an expert advice from an Independent Financial Advisor.
2021 small savings challenge
You’ve probably seen this one doing the rounds on social media and it really works for some people. If your New Year’s resolution is to save more in 2021, you might want to take on a savings challenge.
If you stick to it, you’ll have £1,378 in savings by the end of the year. It starts by saving just £1 in the first week, £2 the second week and so on. You can also take part electronically by using an app such as Monzo.
Make more money
Think of imaginative ways you can make more money from your assets. Could you hire out your car, driveway or loft space? It ‘s definitely worth considering as it could give you an extra £100 to £400 a month.
Pay your mortgage off early
If you’re in a position to do so then it pays to pay your mortgage off early but check for penalties in your agreement first. I can pay off an extra 10% per year without being penalised and it will of course help save you money in the long run.
Start a side hustle
There are so many opportunities to earn a second income from your own home these days or sell your services via sites like Fiverr or Nextdoor.