10 New Year resolutions that will save you money
Many of us start the year with the best intentions, but only one in 10 of us will stick to our New Year resolutions. Improving your finances is a common goal but, just like losing weight and quitting smoking, there are no quick solutions. The best way to make 2016 a year of real achievement is to make a few small, regular changes and see the results over time. So if your goal for this is to fix your finances, let these money goals inspire you…
1. Make a budget and stick to it
Most of us have a budget, at least in theory, but few of us know exactly where our money goes and how much. The start of the year is the perfect time to create a budget sheet to calculate your monthly outgoings and track your spending. This will help you identify where you can make cutbacks and see how much you can save. If you’re unsure where to start, Citizens Advice has an online budgeting tool and the Money Advice Service also offers a money health check.
2. Get your credit into shape
Did you know that having a bad credit score could result in you paying more for other financial products such as a mobile phone contact? Research from Aqua credit cards found that having a bad credit rating costs the average household an extra £1,170 a year.
Don’t know your credit score? You’re not alone; Aqua also found that 79 per cent of Brits have no idea what their credit rating is. Noddle, Experian and Equifax offer credit checks where you can monitor your score and get advice on how to improve it. Noddle is free, and Experian and Equifax offer a free 30-day trial, but remember to cancel before the end of that period to avoid a monthly fee.
3. Make the most of your savings account
When was the last time you checked your savings account? It’s easy to put money away and forget about it, and if you are one of the millions of people who have savings with a high street bank, then you could be losing hundreds of pounds a year in lost interest.
Henderson Global Investors found there’s more than £370billion sat in cash accounts earning less than 0.4%. Charter Savings Bank also found the average saver earned a measly £33 per year on their savings. So make sure you also check the challenger banks, as these are dominating the best buy tables and paying interest rates that top 2 per cent, which is over five times as much interest that some savers currently earn.
4. Make the most of financial products
Insurance products may not be the most exciting of purchases, but they’re hugely beneficial. It’s worth checking whether you entitled to any discounts or perks. For example, Tesco gives customers Clubcard points on home and content insurance. Age UK and Policy Expert automatically increases your cover by 10 per cent during events and holidays like Christmas or a wedding. Vitality also rewards health and life insurance members for being healthy by offering half-price Virgin Active gym membership, free cinema tickets, free weekly Starbucks drinks and discounts on BA flights.
5. Bring a packed lunch to work
You’d be amazed at how much money you could save by doing this every day. Vouchercloud recently found 62 per cent of Brits spend £1,840 year buying lunches, that’s the equivalent to £8 per day. If you make your own lunch at home you’ll spend an average of £552 a year on it, which means you could save more than £1,000 a year.
6. Get on your bike
Travelling to work can be expensive and for those who live within walking or cycling distance, it’s really worth taking advantage of this. Not only will it be cheaper but it could save you hours in time too. The TUC found the average commute is now more than two hours long! If you have no option other than to get the train, then check whether your workplace offers a season ticket loan. Buying a season ticket could save you hundreds of pounds each year and comes straight out of your pay cheque.
7. Expand your financial knowledge
If you really want to make the most of your money, then understanding basic finance is a good starting point. Whether it’s your pension, general savings or mortgages, there’s lots of websites to help you. You can also sign up to the Open University’s Managing My Money course in partnership with Share Radio. Not only will you learn about your finances, you’ll also get a certificate at the end of the course. The best part is… it’s free!
8. Pay in cash and save the change
Watching your cash grow will encourage you to save even more. Try paying for items in cash and save your loose change. You’d be surprised at how much you can save over the year. Paying in cash can also save you money. You could challenge yourself by withdrawing £10-£20 on a Monday morning and ensure it lasts the full working week.
9. Look to the future
Ever heard your grandparents say they wish they had saved more? Well, don’t let that be you. The Share Centre recently found that more than a quarter of those in their sixties admit their biggest financial regret is not saving when they were younger. If you want to live a comfortable retirement then start saving now – even small amounts make a difference. Aegon found that someone saving as little as £20 a month at 25 could end up with a pension pot £10,000 larger than someone who started saving the same amount at 35, despite only contributing £2,400 more.
10. Reward yourself
A budget shouldn’t be treated as a yo-yo diet. You still need to have a treat or two and you’ll be more likely to succeed in the long run if you do so (within reason, of course). Try going out for dinner once every few weeks, or buying that outfit at the end of the month. You’ll feel better for doing so and you won’t feel as though you’re really missing out.
Copy courtesy of Georgie Frost, Share Radio’s consumer champion and presenter of Consuming Issues daily show.