Check your bank statements. Start by running through everything that comes in or goes out of your account, suggests Bella Caridade-Ferreira, founder of comparison site Compareandinvest.co.uk. “You might have subscriptions you no longer use or discover that you spend £60 on takeaway coffee every month, which equates to £720 a year. Put the money you save on deposit or in a tax-free Isa.”
Work through bills. Check how much you pay for your motor or household insurance, gas and electricity, mortgage and other regular household bills, then see whether you can get a better deal elsewhere. Letting your policies roll over on auto-renewal will drain money out of your account.
Make every payment. Just missing one or two regular payments can damage your credit record, making it harder to borrow money in future. You might rack up penalty charges, too. “If you have credit cards, make a minimum monthly payment by direct debit, to avoid non-payment charges,” Caridade-Ferreira says.
Build rainy day savings. We all need some cash for emergencies, ideally on easy access. Caridade-Ferreira says: “Save at least three months of outgoings in a rainy day account so you have some wiggle room when things go wrong.”
Build up some “sunny day savings”, too, she adds. “Put money aside for fun things too, like holidays or treat days, rather than whack your annual holiday on a credit card.”
Put cash to work. Don’t leave large sums in your current account, where they will earn a little or no interest, says Savings Champion founder Anna Bowes. “You can still get up to five percent on easy access, so shop around. Interest rates may fall in 2024, so consider locking into a fixed-rate savings bond today”
Target unpaid debts. Christmas is over, now we have to pay for it, says Karen Barrett, founder of find-a-financial-adviser site Unbiased.co.uk. “Clearing any debts you have is a financial priority, given today’s higher interest rates.”
If you have several debts, focus your firepower on the most expensive first, while making minimum payments on all the rest. If struggling, to their and get free help from charities StepChange, Citizens Advice or National Debtline, while shunning debt management agencies that charge for advice.
Follow the 50-30-20 rule. This financial advice rule of thumb helps you cover bills today while building money for the future, says Alice Haine, personal finance expert at fund platform Bestinvest. “This involves directing 50 percent of your income towards essentials like household bills, food and transport. A further 30 percent goes towards leisure activities such as days out and holidays, while the final 20 percent is earmarked for long-term saving and investing.”
Younger people should aim to invest a higher percentage, while pensioners are likely to spend more on essentials, Haine adds.
Cut mortgage costs. An estimated 1.6 million homeowners will come to the end of a low-cost fixed-rate mortgage this year, and see their repayments soar. The only good news is that rates have retreated lately, with further falls expected next year.
Haine says find a new mortgage before your current deal expires to avoid spending a single day on your lender’s standard variable rate, as SVRs average a punitive 8.19 percent.
Most lenders allow you to overpay up to 10 percent of your mortgage each year. If you have the cash, this can help cut your debt and interest charges.
READ MORE: Falling interest rates, mortgages and taxes cuts – how 2024 will be better
Check state benefits. Confirm whether you’re getting your maximum state pension, or any benefits such as Pension Credit, Attendance Allowance and Carer’s Allowance.
Around 880,000 low income pensioners miss an average of £2,200 a year in state support, said Stephen Lowe, group communications director at retirement specialist Just Group. “This money could make a transformational difference to living standards.”
Check entitlement at gov.uk/benefits-calculators or Turn2us.org.uk, your local Citizens Advice or charities like Age UK.
Beware scams. Sadly, this has to be everybody’s New Year’s resolution, every year. Scammers are getting harder to spot and can swindle you out of huge sums with no guarantee of redress.
Jonathan Watts-Lay, director of Wealth at work, says beware anyone who contacts you out of the blue. “Check whether their company is registered with the Financial Conduct Authority or visit fca.org.uk/scamsmart to find out the latest threats.”
Invest for little ones. Children and grandchildren need all the support they can get, so consider saving in a tax-free Junior Isa on their behalf. Families and friends can invest up to £9,000 a year, but even small amounts like £25 or £50 a month can add up over time.
Plan ahead. Writing a will ensures your assets go to the right people after you die, yet many never get round to it or let theirs go out of date. Consider setting up a Lasting Power of Attorney, in case of dementia.
