2017 is finally here and although you don’t need to wait until January to make changes to your life, the New Year can bring with it some much-needed inspiration and encouragement. If 2016 was cruel to you financially or you’ve realised it’s time to get your financial shit together, here are a bunch of New Year’s Money Resolutions to help you become a more successful adult this year.
1. Boost your savings with a Help to Buy ISA
If you’d like to buy a home of your own one day, make this the year you open a Help to Buy ISA. For every £200 you place in the account, the government will add another £50 which you can use towards your first home. Check out my Help to Buy ISA guide for more info.
2. Save for retirement AND a house with a Lifetime ISA
Alternatively, you could open a Lifetime ISA and team your deposit savings with your retirement fund. You can deposit up to £4,000 a year into your Lifetime ISA and the government will top this up by 25%. This money can be used towards a home or retirement. To learn more, take a look at my Lifetime ISA guide.
3. Make use of your workplace pension
Most pension experts argue that a workplace pension cannot be beaten in the retirement saving stakes. So if your employer offers one (sadly, not all employers do just yet) make the most of it!
Retirement may seem like a long way off and thanks to more imminent expenses such as houses, cars and weddings, 20-something often push it to the bottom of the list. But chances are, you will get old and you will want to retire one day. Unless you want your future self to be shivering in a dark bedsit and living off beans on toast until you eventually kick the bucket, start saving for retirement now!
If you’re self employed or your boss doesn’t offer a workplace pension just yet, opening the aforementioned Lifetime ISA in April may be your best bet for now.
4. Open multiple current accounts
Spreading your cash across multiple current accounts can be a great way of organising your savings and benefiting from the best interest rates.
At the time of writing, the most generous current accounts include:
Santander 123 – 1.5% interest on up to £20,000 & 3% cashback on bills
Bank of Scotland – 3% interest on up to £5,000
Nationwide Flex Direct – 5% interest on up to £2,500 for the first year. After that the rate falls to 1%
TSB Classic Plus – 3% interest on up to £1,500
Opening multiple current accounts might sound like a lot of hassle but in reality it’s so much quicker than you’d imagine. Most online applications take between 5 to 15 minutes to complete.
5. Track your spending for a month
It’s hard to save money when you don’t know exactly where your money goes each month. This is why keeping a spending diary for a month can transform your finances and make you loads richer. Trust me. You might think you know exactly where your money is going but chances are, you’re wasting money unnecessarily without even realising. I kept a spending diary for the whole of April 2016 and was amazed at how much of my cash was going to waste.
6. Shop second hand
Shopping second hand instead of buying everything new can be a great way of slashing your expenses without giving up shopping completely. Buy your clothes from charity shops, update your home with furniture from Preloved, and get your gadgets and entertainment from CeX.
7. Have a decluttering session
This January, have a huge clear out and get rid of all the things you no longer want and need. Not only can you make money by selling your possessions, you’ll be amazed at how a new minimalist attitude can transform your outlook. By ditching all you old stuff, you’ll be reminded just how meaningless material possessions can be. And once your home is clean and clutter-free, you’ll hopefully be reluctant to fill it with junk again and less likely to shop!
8. Get a side hustle
Getting a side hustle alongside your current job can be a great way of boosting your income while also increasing your skills and strengthening your CV. No idea what to do? Here are 50 side hustle ideas.
9. Prioritise an emergency fund
If you don’t already have an emergency fund, saving one should be your main priority in 2017. In fact, I’d go as far as saying you should eliminate all unnecessary spending until you have one. That’s right. Ditch Friday nights in the pub, make do with the clothes you own, embrace ‘fakeaways’ instead of takeaways and learn to say ‘no’ to impulse purchases. This might sound harsh and boring but it’s for your own good! It’s better to go without these things when you have a choice rather than drive yourself into debt and/or poverty thanks to unexpected emergencies you haven’t budgeted for.
Once you’ve saved £500 for an emergency, reintroduce one unnecessary expense/treat into your budget. When you’ve saved £1,000 for an emergency, reintroduce another treat into your budget. Keep going like this until you’ve saved a comfortable amount. Not sure how much to save? Take a look at this post where people discuss how much they’re saving for an emergency.
10. Pay off your debt
If you’re in debt, you may feel tempted to bury your head in the sand and pretend you’re doing just fine. But the problem won’t go away on its own and the longer you try to ignore your debt, the worse it will get. Address the issue now! Spend an afternoon figuring out exactly what you owe and have a good think about how you’re going to pay it back. Don’t be afraid to ask for help. StepChange can be a great place to start if you have no idea how to your finances back on track. Take a look at this post where I discuss which debts to pay off first.
11. Invest (I know I said 10 but here’s another one)
If you’ve already paid off all your debt and you’ve got a healthy emergency fund, it could be time to start investing! Sure, investing might sound scary and intimidating but it’s one of the most effective ways of growing your wealth over time.
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