Struggling to find that ‘something’ to cut out, start doing or fully commit to in the New Year? Eating less chocolate may help you lose a pound or two, as might starting to jog a couple of times a week or joining a gym, however, a New Year’s resolution which tackles the other kind of pounds might be more worthwhile in the long run. Here are our top suggestions for money resolutions to transform you into a responsible spender in 2011…
‘I will create a budget and stick to it!’
How often do you find yourself popping to the nearby posh sandwich shop on your lunch because it’s closer than the cheaper one up the road? Little splurges like this may not seem like a big deal, but they add up! Make it a priority in early January, to sit down and work out how much money you need for various things each month: bills, fun, savings and anything else you regularly spend on. Don’t do it off the top of your head; get your bills and receipts from the past few months and look at the figures- it’s amazing how a few pounds here and there can be mysteriously forgotten. Websites such as BudgetBrain.com will help you create a plan to stick to!
‘I will start saving!’
Savings will get you what you want- whether that’s six months travelling the world, a deposit on a little flat in your home town or the designer handbag you’ve been lusting after for months. Even saving £20 a month is better than nothing, if you can spare the money and are able to commit to putting it away each month. Do some research to find the most suitable savings account for you and look out for high interest rates to help your stash grow. One word of warning though- make sure you’re debt free before you start to save; the interest on savings accounts is usually much lower than on current accounts. Therefore, any money you make from interest on your savings is likely to be swallowed up paying interest on your current account!
‘I will improve my credit rating!’
It’s important to repair bad credit as ongoing problems will affect your ability to borrow in the future. Simple things, which you may not even be aware of, can negatively affect your credit rating; from not being on the electoral roll to never having had any sort of financial contract in your own name. While neither of these instances are bad things, they will make credit companies think of you as an unknown risk and have the potential to give you a bad credit rating. Other steps you can take include getting a credit card to make small purchases on, which you can pay off in-time each month. You may find that at first you’re only accepted for a card with a higher than average APR but, in time and provided you use it responsibly, you’ll probably be accepted for cards with lower interest rates.
‘I will beat the minimum payment!’
Of course, making a monthly payment of any amount on debts you have is hugely important, however, you may not realise that by just making the minimum payment offered to you, you are extending the length of time that the debt exists. In fact, the minimum payment you’re making is probably just paying off your interest for the month, meaning you’ve not even started paying off the debt- and the longer you do that, the more the interest grows and the more the total debt grows. The good news is that paying anything more than the minimum payment stands you in good stead to beat the debt quicker. Of course, setting up a direct debit for the minimum payment is a good idea as it stops you missing payments (and therefore being fined or your credit rating being impacted), but always try to pay that little bit more to clear your debt faster!
‘I will enjoy myself… on the cheap!’
Saving money doesn’t have to be boring! And no, we’re not recommending that you swap your Saturday nights down the pub for evenings at home playing scrabble and drinking tap water. There are, however, ways that you can save money and still have a good time. Keep an eye on discount voucher websites- you could find yourself eating out for half the cost, shopping in all your usual favourites but with a hefty discount and getting bargain-priced tickets for shows and events. Of course, treat yourself once in a while but make 2011 the year that you start to really enjoy discount vouchers!