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New Year Financial Resolutions

New Year Financial Resolutions
At MoneyMagpie, we understand that sticking to your financial resolutions can be tough, so we’ve come up with some ideas to help. I am Vicky Parry: consumer expert and financial specialist over at MoneyMagpie.com. 
Each month I will be joining you all on Readers Digest to share some of the incredible ways you can navigate your financial life and help empower you to make extra money, save money and even start investing.
Every year, two thirds of us make New Year’s resolutions whether it’s starting a diet, quitting smoking or heading to the gym, but when it comes to health and well-being in 2024, getting your finances in order tops the list.
The average household debt in the UK is £65,724, with at least £2,409 of that owed on credit cards. Add to that the worry about paying energy and food bills and it’s little wonder we’re all feeling stressed.
So what better way to use our cold, dark winter evenings than to create some small but positive changes that could have a big impact on your financial outlook for the year ahead?

Draw up a budget plan

With the dawn of a new year, we all start out with good intentions to stick to our goals but without a long-term strategy in place, they can easily fall by the wayside.  But always ask yourself these two questions, Do I Need It?  Could I Do It More Cheaply?
Get your bank statements, household bills and receipts and work out where you can save money.  Make sure you have the best deals on everything from your broadband and TV to your energy and food. Do you use the magazine and gym subscriptions you took out?  if not, cancel them.
I saved £600 last year on my car and house insurance simply by shopping around and not settling for the renewal figure I’d been sent.  Customer loyalty, I discovered, very seldom pays.  Yes it’s time consuming, but I felt a real sense of triumph when I saved such a huge sum all for the price of a bit of searching on comparison websites.
Cutting out your £2.50 weekday coffee could reduce your annual outgoing by £600.  Making and taking some lunch to work is both cheaper and healthier and will save hundreds of pounds annual.
Image of a lady carrying two coffees in disposable cups
Work out how you are going to cut back so you can free up money that you need to pay off your debt, and set up a direct debit to pay off the one with the highest interest rate first.  Once you’ve set it up there’s no dipping into it for something else and it will help you keep on track.
Paying off your highest debt first is known as the avalanche method while paying off the smallest is called the snowball method.

Balance Transfer Cards

If you are struggling with making payments consider a 0% interest balance transfer card.  You get a new card to pay off debt on old credit and store cards so that you owe just one card - you are consolidating your debt.  The card you transfer will have an agreed period during which you pay no interest on the debt. There may be a small fee, but it means you become debt free quicker because more of your repayment is going to tackle the money owed, rather than being lost in high interest rates.
Image of a couple of brown Mastercard credit cards
Barclaycard are currently offering 29 months at 0%, as long as you pass their ID and fraud checks, while Santander offer 26 months. It’s worth shopping around to see what suits you and your debt best.
Savings - If you’ve got some money in the bank, consider using some of it to pay off your bigger debts.  It will free up money you’ve been having to spend, plus the interest, and you can start to save up again without the worry of all that debt.

Financial Goals

Look back at last year’s spending and see where you made financial mistakes and where you succeeded. Then look at what you hope to achieve financially during 2024.  Maybe it’s paying off a credit card or finding a way to make some extra cash to put towards a deposit for a mortgage. It’s only by analysing your spending and writing it down that you can see things clearly and stick to your goals.  Sometimes it will mean short-term pain for long-term gain, but keep you goal in sight.
Pay Fast and Buy Slow - Always try and pay your bills as soon as they come in to avoid late fees, which, with interest payment, only add to your debt.  If you are an impulse shopper, try and put yourself on pause. Do you really need it? 

Start a Side Hustle

Baby sitting, pet sitting, tutoring, crafting, baking.  If you’ve got a hobby or skills you can put to good use to make a bit of extra money then why not make a resolution to develop it this year?  It could bring in a bit of extra income and help get those debts down.  If you don’t have debts then what a great way to create savings.
Talk to friends and family - there’s a lot of stigma about money and debts. We’ll talk about all sorts of things but if we’re having money worries we tend to keep it to ourselves.  Jasmine Birtles, founder of MoneyMagpie.com is partnering with debt charity, Community Money Advice (CMA) to launch Stop The Shame campaign in a bid to get people talking about money and help with the country’s debt crisis.
Experts at CMA admit shame and guilt are the main reasons people let their debts escalate and if they’d been faced sooner, they wouldn’t have spiraled out of control.
Image of a lady sat at a table with calculator, notepad and pen

Check your pension

You are never too young to start a pension. Yes, it might seem like it’s years into the future but you will need to put money aside whether through a work pension scheme or a private one. The earlier you start, the lower the payments are likely to be.  Ask to speak to someone and see what is on offer.
Check your state pension and how much you are on track to get by going to gov.uk/check-state-pension  it will help you see where there are shortfalls.
It might not seem like a priority but a little saved now can make all the difference when it comes to retirement.  Putting £30 extra away a month from the age of 27 could see someone accumulate an extra £100,000 by the time they reach the current state pension age.
And track down lost pensions.  There are 2.8 million forgotten pension pots from people who’ve moved employer.  The average lost among 55-75 year olds is £16,004.  So why not use the government’s pension tracking service to contact your old employer, or use a service like Gretel.
And finally, what better way to be a great financial role model and keep your resolutions on track than to start saving for your children’s future.  Small amounts will snowball and give them a nest egg that could help them keep their financial resolutions when they grow up.
Oh, and don’t forget to take advantage of free money when you see it. For example, at MoneyMagpie we’re currently giving away £100 for Valentine’s Day. Enter here.
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Banner image credit: pexels.com 139050_Photo by Anthony 🙂
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