10 Simple Financial New Year’s Resolutions
As the end of another year approaches, we start looking forward to what 2017 will bring. Many of us (around 26% according to surveys) will be making a new year’s resolution and most of us that do (around 88%) will never carry them through.
Many people do think about their finances at this time of year – maybe after some excessive Christmas spending or maybe just thinking about the year ahead. A typical resolution might be to ‘sort my finances out’ but that’s way too vague – what does that even mean? Money is central to so many of the things we all do and the way we live our lives, that we think it’s important to have a few different, more specific, financial resolutions so that you have a chance of actually making them happen.
Even if you don’t manage to do all these things in 2017, just making some progress with your money could create a huge impact. Just pick the resolutions you like from our top 10 list below and build your own financial new year’s resolutions.
1. Pay off debt. If you have any debts (especially those with high interest charges), resolve to pay them off as quickly as possible. Write down a list of all your debts, the rates you are paying and how much you owe. This might be a scary exercise but you need to do it. Commit to a plan to pay it back.
2. Build an emergency fund. Everyone should have some funds set aside for a rainy day. What would happen if you lost your job or became seriously ill or needed to fund major repairs to your home? It is usually recommended to keep around 6 months of living expense in an emergency fund.
3. Check your insurance. You insure your pets and your car, right? What about your life or your income? Take a cold hard look at what you insure and work out your priorities. They key thing to do is always be thinking about the ‘what ifs?’ as you contemplate the things you should insure.
4. Save a bit more. As a nation, we don’t save enough. Whether it’s for something specific or just for the longer term, in an ISA, savings account or a pension, try to put a bit more away. Whether you save or invest, putting money away for the future is a great thing to do. Your future self will really thank you.
5. Make a will. If you have a will, make sure it’s up-to-date. When did you last check it? If you don’t have one, get on with it. Wills don’t need to be complicated or costly, just get something in place. Don’t think you need a will? Time to think again. Do some research and see how important a will is.
6. Review your bills. For most households, their bills are a massive proportion of what they spend. The mortgage, utilities, financial products and food add up to a lot. Many people can save huge sums with simple actions. Re-mortgage to a lower rate, switch your utility and energy providers to get the best deal, review your insurance and other financial products, think about your shopping habits and minimise food waste. Do these things and you’ll be well on your way to having lots more money in your pocket to save for the future or blow on something you really love doing.
7. Learn more about money. ‘Knowledge is power’ they say and it’s definitely true. By understanding your money better you will be able to make better financial decisions. Commit to learning a bit more about your finances and if you have kids, you really need to teach them, too. Far too many children are still growing up without basic financial skills so take the time to explain the basics to them – things like credit, loans, savings and why they will one day need a pension.
8. Review your investments. If you have money in an ISA, pension, bond or anything else, when was the last time you checked how your money was growing? Whether it’s cash earning (very little) interest or investment funds, you need to keep an eye on what’s happening. Put a diary event in to sit down and look at your investments at least once a year and ask whether the charges you are paying and the returns you are getting are acceptable – and if not do something about it.
9. Make a plan. This sounds daunting, right – a financial plan. But all you have to do it sit and think about your current situation. Open a spreadsheet and note down your assets, liabilities, income and expenditure and think about where you are. Are you financially secure or is there an issue? Next, think about the future. Want to retire at 65? Well, how much do you think you’ll need to fund your lifestyle? How will you afford it? Start to think about your pension and investments and what you need to do to get on track. This doesn’t need to be overly detailed – just take some action so you are more on course than you were before.
10. Enjoy your money. Life’s too short to be worried about money all the time. When you’ve got your finances in check, you can free yourself to spend your money on the things you love. Increasingly, research is suggesting that experiences rather than possessions are what make us most happy so do something impulsive, go on an adventure and see the world. These same studies show that people also get huge satisfaction from helping others, so volunteer your time, give more to charity or treat others to something special in 2017.
Here’s to 2017
We would like to take this opportunity to wish all our readers a very happy new year. We hope you have found this article useful and think it has some useful ideas to help you make the most of your money and achieve your goals in the year to come. May 2017 bring you happiness, fulfilment and prosperity.