LIVING & LIFESTYLE

Wednesday, 23 December 2015

Your Top New Year’s Resolutions for 2016

New YearWe Brits are not terribly original when it comes to New Year resolutions. Get fit, lose weight, find love, learn a new skill – these are all top of the list when the first of January rolls around.

But there’s one resolution that could pay dividends all year round and that’s getting your finances into order. Whether you’re wealthy or feeling the pinch, taking steps to reorganise and rejuvenate your money will help you make the most of 2016.

So what are the right resolutions for a wealthier new year? Here are some good ideas to start with:

 

1.       Dedicate some time to your finances

Yes it’s a bit dull; yes everyone has better things to do. But spending just an hour a week to look over your finances, find better deals on household bills, pay bills and double check your household budget can make a big difference.

Switching to cheaper deals on energy, insurance and other bills can save you hundreds of pounds over 12 months, but loads of us simply don’t do it because we don’t make the time. If you get into a habit this year of regularly looking over your finances then you’ll save hundreds of pounds and understand your finances much better.

 

2.       Plan your way out of debt

A lot of people have an awful lot of debt after Christmas. It’s all too easy to turn to credit cards, loans and overdrafts to pay for shopping and treats. So, a really good resolution for January is to work out how to repay that debt as quickly as possible.

Draw up a budget so you can tell exactly how much you can afford to pay off your debts each month – the quicker you manage it the cheaper it will be overall. Don’t be tempted to make only the minimum repayments or you might still be clearing the debt by next December.

If you’ve managed to stay out of debt all year then that’s great news. But it’s still worth looking at obligations like car loans and mortgages, so you can work out whether you can afford to overpay. Mortgage overpayments can save a lot of money over the remainder of the loan and most providers will let you overpay by a certain amount without any penalties.

 

3.       Make an emergency fund

You can’t insure everything, so it’s a good idea to put some money aside for emergencies. Around three month’s-salary or income equivalent is a sensible goal but whatever you can afford to save each month will be a good financial cushion in a crisis.

An ISA – individual savings account – is a great place to stash an emergency fund if you’ve not already used your allowance as it means the taxman can’t touch your returns. As long as you keep your emergency cash in an account that lets you access the cash straightaway then there’s no reason not to use your tax-free allowance.

 

4.       Budget your extra spending

Everyday spending, the sort you don’t really think about, can soon add up. A coffee on the way into town, a bought lunch and a magazine and it’s easy to spend £10 without really noticing where it went.

Of course, if you decide to never buy a coffee or a sandwich again then you’ll soon break that resolution. But if you set an affordable discretionary budget each week and keep it in mind then you’ll get your unnoticed spending under control without giving up every treat you enjoy.

 

5.       Cut your food bill

There are loads of ways to reduce food waste and bring down your shopping bills, which is good news for the environment and good news for your pocket too.

Love Food, Hate Waste estimates that the average household throws away around £50-worth of edible food every month; that’s £600 a year.

Making a food plan can help cut out wasted food and eat up leftovers. It can also help shoppers plan healthier meals. The NHS has a free recipe finder and meal planner that suggests cheap, healthy ideas for up to four people. 

If you visit the Love Food, Hate Waste website then you can also get some tips on using leftovers and portion sizes, which will also help slash waste and cut what you spend on groceries.

It’s easy to start the New Year with good intentions. Maintaining them can be the hard bit. But with these helpful pointers, you should be able to make some resolutions that stick, and help you in the long run; even if you don’t make the most of your new gym membership.

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