Make Your Finances Your New Year’s Resolution This Year

Make your New Year’s resolution this year one that you can keep: make it the simple declaration that you will get your finances under control…step-by-step.

It doesn’t have to be any more complicated than that. Simply that you will get your finances under your control, not the other way round!

Firstly, though, it’s worth acknowledging that January can be a tough time to get on top of your money. Be kind to yourself and don’t expect to do it in the first week. It might take months, but you’ll do it.

Studies have shown that in January millions of people in the UK are left with debt after overspending at Christmas, so don’t be put off setting up those financial resolutions.

It’s not just about getting on top of your money, either. It’s also about creating wealth for yourself in the long-term. Why should you scrimp and scrape for the rest of your life? There is wealth to be had and you can have it!

Here are the steps for creating your new year financial resolution…

• Your financial plan for 2024
• Kick debt into touch
• Jasmine’s financial resolutions: live by these rules
• Try to invest: even if it’s £2 a month
• Don’t hide from finances
• Supplement your income
• Jasmine’s tips for the self-employed

Your financial plan for 2024

Take a bit of time out to daydream.

Yes really!

Sit back and think about what you would like from life, what your financial goals are – maybe it’s early retirement, or getting onto the property ladder or setting up your own business.

Think of those lovely big goals and work back from them. Once you have an idea of what you’re aiming at it makes it easier to make changes to your lifestyle right now in order to achieve those goals.

So once you have an idea of what you are aiming at and (roughly) how much you think it would cost to do that, then you can look at your income and expenditure now to see how much more you need to put aside into investments in order to achieve your goals.

Check your outgoings

Go through your bank statements to see what you’ve been spending.

• See what you are overspending on and cut that out
• See if there are any direct debits or standing orders that you could stop

Increase your income

Is your current income too low for your goals?

• Could you increase your salary by asking your boss for a raise?
• Could you increase your income by doing a side-earner? Check out our Make Money section for ideas.
• Could you move to a better-paid job? See ideas on how to do this here.

Kick debt into touch

Of course, if you’re in annoying debt then you have to get that sorted before you start seriously saving for your goals.

It’s actually not that hard to do this, even if your money’s in a complete mess at the moment.

Many of our money problems come from not facing our situation (keeping bills in the drawer, not looking at our bank statements, spending without thinking, and so on) so get those bills out, take a good hard look at where you’re at and you can work from there.

Money problems can also come from how we’re feeling and what our emotional situation has been like, so don’t be angry at yourself for letting things get into a mess. We are all working out how to run our lives properly and even our best efforts to get on top of things can be thwarted by events!

Once you have taken a good hard look at your financial situation (ideally with a nice friend or family member with you to hold your hand while you do it), then set yourself a plan to pay off debts and then put money into savings.

If it all looks too horrible, go to one of the free debt advice charities like Community Money Advice, StepChange, Citizen’s Advice, National Debtline, Community Money Advice or Christians Against Poverty. They will help you speak to creditors if you need it and will also show you how to budget.

The good news is that once you get a handle on debt and learn to live on less in order to pay off, you will be in a really good place to continue to save and put the money you don’t spend into cool investments!

Jasmine’s Financial Resolutions: Live by these rules:

Then, keep some basic, common sense rules in mind when you go about your life, day-to-day this year…

1. Spend less than you earn and invest the what’s left over (we understand that this simply isn’t possible for some incomes, but for those who can – do it!)
2. Pay yourself first. Set up standing orders at the start of the month into savings and investments for yourself before you spend anything.
3. Regularly think about what you spend. Do you need it or even want it or are you just being influenced to spend on rubbish? Keep questioning.

Try to invest. Even if £2 a month

Once you’re properly out of debt and starting to save well, it’s important to put some money aside into a savings account to cover you in case you lose your job and can’t pay the bills for a few months.

After that, though, it’s important to invest each month, even if you only have a couple of quid to do so.

In fact there are some handy apps that help you sweep a few pence into an investment fund every now and then. Try Wombat or CIRCA5000 apps that do this for you.

Remember Financial resoutions needn’t always be big ones. It can just be to sweep £2 a month into investments and then gradually increase the amount as you find yourself with a bit more spare cash each month.

Make that last tenner grow

It’s always a good idea to think long-term when you’re looking to grow your money. In the short-term there are risky possibilities like buying cryptocurrencies, but to have a proper possibility of making money, put that tenner into a stocks and shares ISA, ideally in a nice cheap index-tracking fund, and leave it there (adding to if you can) for a good ten years.

Another possibility is to put it into a tax-saving pension, either your work pension (always a good idea to max that out as much as you can) or set up a Self-invested Personal Pension (SiPP) and put the tenner into that. You will instantly get an extra 20% added in by the government (the tax you would have paid on that money) and over time the tenner will grow until you retire.

Don’t Hide From Finances

Managing your money can seem like an impossible dream and just too complicated to even try to do.

But happily there is a LOT of help on the internet, particularly here at MoneyMagpie.com!.

There are also the free debt advice charities mentioned above, there are Credit Unions that help their members budget, t

It’s also worth looking at the money pages in your regular newspaper as they have helpful advice. Just reading one money article a week in a newspaper or newsletter like the ones we send out at MoneyMagpie will give you more and more information to work with.

Supplement your income.

There are so many ways to supplement your income these days. Whether it is selling your old Computer Games to tasting food, there are lots of opportunities here We have great ideas for that on MoneyMagpie so do look here.

And Finally Jasmine’s tips for the self-employed:

“Yes I have always been self-employed so I have learnt the hard way! The important thing for people like us is to have money set aside ‘just in case’. Our payments are often irregular so if you have money set aside then it will cover your bills in the months when you don’t get paid. Also force yourself to set up a pension (probably a SiPP) early on, even if you just put in £25 a month. You will thank yourself later on! If you have the money, also set up a stocks and shares ISA, including a Lifetime ISA if you’re under 40. Set up a standing order every month to put money into that as well as your pension and that will help to set you up for later.

If your profession doesn’t quite cover your costs at the moment, look into other ways to supplement your income. Again, this will make it easier for you to get through the months when no one is paying your invoices (sadly there are a lot of those!).”