After a particularly financially challenging 2023, lots of us are likely to want to start 2024 with new money goals to help us shore up our finances, but where’s the best place to start?
Here’s our rundown of some of the most popular financial resolutions, and how to make sure you stick to them…
Cutting back on spending
If you want to succeed at this, it’s no good to just have a vague goal of spending less. It’s much better to set short term and achievable goals (such as spending £20 less a month on sandwiches at lunchtime or spending £50 less a month on going out). Give yourself a reward every time you reach a goal and set a new one. If you don’t know where your money is going, keep a spending diary for at least a month. Find out ways to cut your costs and save more in our guide How to save money – 21 money saving tips.
It’s a good idea to draw up a budget to help you manage your money more effectively. Knowing exactly what is coming in and out each month can give you a much better understanding of your money and how you spend it. Our article How to make a budget and stick to it can help you get started.
Saving more money each month
Again, make this as easy as possible. Don’t stress too much about the account or the amount you start off with, it’s more important to get started. Set up a standing order and choose an account where it’s easy to see how much you’re saving as that will motivate you to carry on. You can find out ways to improve your returns in our guide Five ways to boost your savings returns.
Regular savings accounts can be a good way to start the savings habit, as these require you to pay in a set amount every month, typically over a year. Read our article What are the best regular savings accounts? to find out more about how they work and which accounts are paying the highest interest rates.
Reducing debts
If you have credit card debts and can switch to a 0% balance transfer deal, that will be the cheapest option. Make sure you pay off the debts (if you can) before the 0% term ends though, as you’ll be charged interest at often high rates after that. If your credit score isn’t good enough to get a 0% deal, pay off the debt with the highest interest rate first. Learn more about the cheapest ways to borrow in our guide Balance transfer credit cards and personal loans compared.
Don’t apply for other credit cards or loans if you’ve been turned down by one provider as this will count against you. It’s better to get hold of your credit file before you apply (in case there are any nasties or mistakes) and choose a card that’s aimed at your credit profile. Some will only be open to people earning more than a certain level of income (typically £20,000 or more). Learn more about the importance of having a good credit score in our guide Do I need a good credit score to borrow money?
Review your mortgage
Your mortgage is likely to be your biggest debt, so it’s vital to make sure you aren’t paying more than you need to each month.
Remortgaging can be one of the best ways to reduce your monthly outgoings, with savings often running into hundreds, if not thousands of pounds a year – especially if you’re currently sitting on your lender’s standard variable rate (SVR). This is the rate borrowers usually automatically move onto when the term of any special deal they signed up for finishes.
According to financial website Moneyfacts.co.uk, the average SVR is currently 8.19% (nearly double the 4.40% it stood at in December 2021), while the Bank of England base rate is 5.25% and the best two-year fixed mortgage deals are around 4.59% (although you’ll need a large chunk of equity to secure this rate).
That means that someone with a £150,000 repayment mortgage with 15 years left to run who is borrowing 60% of their property value would be paying £1,450 a month if they were on the typical SVR of 8.19%. Their monthly payments would fall to £1,154 a month if they remortgaged to a best buy two-year fixed mortgage rate of 4.59% – a saving of £296 a month or £3,552 a year.
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,250 reviews.
Looking for a better paid job to boost your income
Getting another job may be the answer but it could be that your existing employer isn’t paying you what you deserve. Asking for a pay rise in the current environment is tough but it’s still worth doing. If you don’t get the answer you want, it’s worth looking around to see what else might be available. Use our Search Jobs tool to find jobs in your local area, or Register Your CV with Rest Less to boost the chances of employers we work with finding you.
Getting the best protection insurance
When it comes to protection, ‘best’ doesn’t necessarily mean ‘cheapest’. Some insurers are keen to make sure their policies look the cheapest on online comparison sites but either the policy is quite basic or they cherry pick people who are the lowest risk. It’s also worth looking at whether you have enough insurance (such as life insurance cover, if you have a joint mortgage, for example). Life insurance is fairly cheap, even if you’re over 50, so if you have a joint mortgage, have children or are receiving child support or maintenance, it’s worth considering. You can find out more about life insurance in our guides Do I need life insurance? and What are the different types of life insurance?
Cutting down general insurance costs
If you’re shopping around for car or home insurance, be very careful about any assumptions that are made about you (how high an excess you’ll pay etc).
The FCA in January 2022 brought in new rules to give insurance product consumers easier methods of cancelling the automatic renewal of their policy as well as making pricing fairer for loyal customers. Whilst overall this is good news for consumers, it doesn’t mean that switching providers will no longer net you any savings. Find out more about this in our guide Car insurance: why loyalty still doesn’t pay.
You can compare car insurance quotes or home insurance quotes today to see if you can find a more competitive quote than the one your current provider is offering. If your insurance isn’t up for renewal just yet, let us know your renewal month here and we can send you a reminder nearer the time.
Sorting out or improving your pension
If you’ve not started your pension or don’t pay much into it, you need to ask yourself ‘what will I live on when I retire?’ If you don’t have a plan (whether it’s a pension, other savings or investments or investing in property) you may end up living on the State Pension and little else. Read our guide Can you afford to retire? to help you work out how much you’re likely to need to save for retirement.
Currently more women than men end up in poverty in retirement. It’s partly because women are more likely to work less or give up work altogether to bring up a family, but women tend to be less keen to lock money away (which you have to do with a pension). Find out how to get started with a pension in our article Saving into a pension for the first time and learn more about the pension gender gap in our article Women and the gender pension gap.
If you already have a pension, look at ways you can take more control over your investment decisions. If you have money in a workplace pension that’s not a final salary scheme, do you know where it’s invested? Most people who join a stockmarket linked pension scheme from their employer invest in the ‘default’ fund which may not be the best option for you. Learn more about where to invest your pension savings in our guide Where is my pension invested?
If you’re considering seeking professional financial advice on the options available to you, we’ve partnered with nationwide independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,500 reviews on VouchedFor, the review site for financial advisors.
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