SWEETIESAL

The start of a new year is always a great time to embrace positive changes and discard unhelpful habits. When it comes to your finances, taking control and getting back on track should be your top priority.

Whether you’re saving for something special or trying to make ends meet, these New Year’s money resolutions can help you to achieve your financial goals:

Create a Household Budget

It’s hard to keep track of your finances if you don’t know what you’ve got coming in or going out every month, which is why it’s so important to have a household budget. Use your bank statements and online accounts to identify your total monthly income, along with every expense you incur. From your mortgage or rent to entertainment and takeaways – be sure to include everything. Once you have an accurate budget in place, you can begin to make changes to your financial habits.

Cut Costs

Reducing your outgoings doesn’t have to mean living frugally or going without any luxuries. Instead, you can cut your costs simply by getting a better deal elsewhere. Millions of people are spending more than they need to on utility bills and insurance, for example. A simple comparison search takes seconds and could help you to save hundreds of pounds a year.

Similarly, look through your spending records and your budget to identify expenditure that you no longer need to incur. If you’re paying for subscriptions or memberships you no longer use, for example, check whether you can cancel them without attracting additional fees.

Get Debt-Free

Becoming debt-free may not happen overnight but you can certainly put a comprehensive plan in place to help you reduce the amount you owe. From negotiating lower interest rates with creditors to using homeowner loans from Evolution Money, there are numerous ways you can work towards becoming debt-free. In addition to this, you can consider formal debt resolutions, like a debt relief order (DRO).

If you’re struggling to make debt repayments or you’re worried about your financial situation, it’s always worth getting professional advice. Many debt organisations and charities provide free, independent advice, so you can access the help you need at any time.

Increase Your Savings

If you want to create a nest egg for the future or you’re saving for something important, it’s important to have a plan in place. Putting away extra funds when you have them won’t make it easy to hit your targets, so be sure to prioritise your savings contributions.

Having a separate savings account makes it easy to allocate money to your savings pot and keep it separate from your standard funds, for example. Similarly, paying money into your savings account on the day you get paid helps to remove the temptation to spend all of your disposable income.

Consider Investing

If you’ve got your bills covered, you’re on your way to be debt-free and you’ve got some cash set aside, you might want to consider investing. With the right investment, you can increase your capital and even generate a second income. However, it’s important to remember that the value of investments can fall, as well as rise, so choose your level of risk carefully.

The lowest risk investments, like savings accounts, may only offer a modest return, but they do keep your capital secure. In contrast, high-risk investments, like stocks and shares or cryptocurrency, could mean that the value of your capital falls but they also offer the potential of high rewards.

Depending on your personal situation and the amount of funds you have set aside, you may well want to create an investment portfolio which features a mix of investments to represent different risk levels that you are comfortable with. Diversifying your investments in this way can help to balance your overall risk and increase your returns.

Taking Control of Your Finances

Many people dread dealing with financial issues but taking control of your money can be a cathartic process. No matter what your current financial situation is, you can take steps to improve your finances, reduce your debts and cut your costs. By doing so, you’ll have more disposable income throughout the month, which means you’ll find it easier to achieve your goals.

Remember – if you’re unsure how to deal with your finances, there’s plenty of assistance available. From financial advisers and investment managers to debt counsellors and information lines, accessing professional support can give you a head-start when it comes to taking control of your finances.