The start of the new year is a great time to turn over a new leaf and try to stay on top of one’s finances but many Britons soon give up on their New Year’s Resolutions.
Experts at Hargreaves Lansdown have put together five helpful tips for those about to take on a set of resolutions for their budgeting and finances.
Sarah Coles, head of personal finance with the group, said: “This year, one in three of us plan to turn over a new leaf when it comes to our finances.
“Unfortunately, these best intentions fall by the wayside – with an impressive one in five giving up within a week – even before we get round to putting the Christmas decorations back in the loft. Fortunately, there are five techniques that will help you stick to any resolution.”
Be specific
It’s important to have specific details about how your resolutions will work, rather than just a general pledge.
A person can start with creating a budget of all their income and how much they spend. This can be done by looking over bank statements, or some banking apps have spending categories showing how much is being spent on what.
A person can then use this data to create a specific pledge, such as cancelling a gym membership or reducing how much they spend on drinks out.
Change one thing
You are far more likely to have success if you break down your financial goals into small changes that are easy to implement.
Hargreaves Lansdown recommends focusing on clearing any expensive short-term debts and then providing for the family with a by arranging insurance and a will.
Start with giving up things you don’t like
It can be hard to give up several of life’s pleasures, so start with things you don’t appreciate and which are costing you money.
This can include overpaying for your mobilg phone use or buying expensive grocery brands, which can be easily switched for cheaper options.
Arrange your life so you do the right thing automatically
It can be challenging to each day try and do the right thing, so it’s better to arrange things beforehand so you automatically do the right thing.
A regular savings account is a good way to automatically build up your savings, as direct debits can contribute into the account each month.
Even a small amount such as £25 each month can help a person build up their savings. The experts said: “Just pay what you can, and set it up to come out of your account on payday – before you have a chance to miss it – so you automatically do the right thing every month.”
Be realistic with your goals
Make your goals achievable and try and reach them quickly so you don’t run out of momentum in your efforts.
Save a sensible, affordable amount each month while building emergency savings, while working on your pensions and investments.
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