The New Year has begun! A fresh slate for you to finally get to grips with the pledges you made the previous year but couldn’t stick to. Yes it’s the usual ‘suspects’ of resolutions that make their rounds at this time of the year such as losing weight, quitting smoking and eating healthier. However the New Year is also a great time to get reacquainted with your finances after the truck load of indulgence and spending in December. Whilst getting healthy and back into shape is the most common resolution on most lists, personal finance is equally important as it can often have a strong impact on one’s physical and mental health. So ensure you set resolutions to improve your financial health too.
We’ve compiled a short list of essential financial New Year’s resolutions you might want to adopt for your financial well-being, with some tips on how to keep them in order to avoid spending the latter part of the year feeling guilty for not following through.
Isolate your savings
More often than not it’s easy to think that once you’ve set up your monthly savings into a savings account you’re organised and good to go. Yet having all your money clumped together makes it hard to track and manage and you can easily end up spending it on the short-term needs such as your holiday or wardrobe with nothing left for the future such as a down payment on a mortgage. One good resolution to have in 2015 is to split your money into four basic savings: short-term, long-term, emergencies (e.g. boiler break down) and retirement. If you do this, your future self will thank you! Or you could get even more organised and scale your savings down further into specifics accounts such as a holiday fund, a car fund or even a child’s university fund.
Track and budget
Tracking and budgeting go hand in hand as if you don’t track what you’re spending, budgeting can be nearly impossible to make. To avoid getting into financial difficulty, establish a reasonable budget and stick to it; no one wants to be out of pocket mid-month and have to scrimp until pay day. Additionally paying by credit and debit card is fast and easy but it can make it difficult to keep a close eye on expenditure which can lead to nasty shocks at the end of the month. If you know you’re budget but you know that you’re prone to over spending then why not take out your weekly budget in cash and leave the card at home? That way you can know exactly how much you have spent and there’s no way you can exceed your budget. Tracking what you have spent is also now easier with the vast number of apps available. Expensify is a good one for being able regularly check your expenditure as it links to all your accounts.
Small cuts make big savings
It’s often the small spends we don’t think about which have the biggest impact on our budget. A little extra planning and organisation such as making your lunch at home can make a huge difference. If you spend what seems a modest £5 on lunch a day this adds up to about £1000 a year. Throughout your working life this can amount to a hefty amount that could be better spent elsewhere on bigger items such as a car or a holiday. Cutting down on other small, non-essential expenses like your daily Starbucks coffee which you could make at home and bring in a flask or walking instead of taking public transport or car for short distances are also great ways to save money in the long term. If you’re in London especially, walking the distance from one tube station to another can be surprisingly short and might save you a few quid on your Oyster. A simple and easily followed goal for 2014 can be to work out where your money is going, figure out what you wouldn’t miss not having and cut it.
Save BEFORE you spend
You vow to save more this year. You begin strategically saving a healthy amount every week or month. Then you give in to a few extra treats here and there and come July you’ve scrapped the saving with not much left to put away so vow to start fresh come the New Year. Sound familiar? Don’t fall into the disappointing resolution cycle and make sure you save your money before you spend it. Automate your savings by setting up a monthly direct debit for the day after you get paid. That way you don’t have to worry too much about putting away the money. You could also do this with your monthly bills so you know you can use the left over at your leisure. Another say to save on your spending is by getting cashback on your purchases. Find out more about guilt-free cashback shopping here.
Credit check up
Checking your Noddle credit report at least once a month is an excellent resolution to set yourself and easy to keep if you set an alarm or reminder for it. Regularly checking your report helps to keep track of your finances but also prevent you from being a victim of identity theft as unusual searches in your report or any unrecognisable accounts opened in your name can be spotted early and dealt with. It’s that simple and will potentially save you a lot less hassle and stress in the long run.
So, that’s a few of our financial resolutions we think you might want to adopt. But if you think there’s a great one that we’ve missed but other Noddle users might want to know about then let us know on our Facebook or Twitter pages.