We often think of the New Year as an opportunity to kick start health and fitness, but it is also a great time to get your finances in order.
There are lots of ways you could boost your savings or financial standing, and they don’t always have to be drastic changes. It’s all about making small amendments to create a bigger difference over time.
Laura Laidlaw, Head of Communications at Standard Life, sets out six resolutions you could incorporate into your financial planning for next year and beyond.
Resolution #1: Reflect and move forward
It is important to look back on the current year when it comes to setting goals for saving in 2021. But remember, this year was unlike any other and might not be a good reflection of the year ahead.
Some might have had to dip into savings due to the pandemic, or maybe even borrow money, while others might have saved even more than usual after cutting the cost of commuting and holidays.
If you had to make cutbacks this year or realised there were certain subscriptions or treats you could live without, consider whether you could carry any of these changes forward into 2021 and use this money instead to increase your savings.
Resolution #2: A little and often
Creating targets for the year ahead can seem daunting, but by breaking it down into smaller more achievable goals, perhaps monthly or even weekly, it will help to make it feel more achievable.
To do this, there are so many tools available to help keep you on track. You might consider using a spreadsheet or a money saving app, or maybe even your bank can help.
It’s important to remember that saving a little and often is much better than setting unrealistic goals that you are unlikely to stick to.
Resolution #3: Look around
We often get tied into subscription deals or utility payments simply because they presented us with a good deal to sign up. We think we’ll switch when the deal ends, but more often than not we forget.
However, one of the top ways to save more money is to switch up providers each year, whether that be TV, WiFi, utilities, insurance or one of the many other regular payments we face.
The reality is you rarely get a better deal by staying loyal, and many will offer great deals in the New Year so it could be a perfect time to switch, putting the money you save straight into savings.
Resolution #4: Make your money work harder
There are many options available to help you get the best return on your money. Take some time to think not about just how much you save, but where you save too.
You might consider saving into a cash ISA for example, allowing for funds up to £20,000 to be held in an account tax free each year. However, currently cash ISAs are offering interest rates of around 1% at best, so it might not be the best option if you’re looking to make your money work harder.
Meanwhile, if you are able to lock your money away for longer, ideally 5 years, saving into a stocks and shares ISA could really pay off in the long run in terms of the returns you might receive.
Resolution #5: Think ahead
It is never too early to think further ahead with your savings. No matter how far off retirement may be, you should take saving into your pension seriously from the moment you enter the world of work.
It pays dividends to your future to pay as much as you can afford into your pension. Whether it be a workplace pension or a private pension, consider making a small increment to your contributions this year.
If you can afford to put an extra 1% of your salary into your pension every other year, for example, it will make a significant difference, especially if you start early, and if your employer will match it.
Resolution #6: Ask for help
Many of us are unsure about asking for help when it comes to our finances, whether it be in fear of opening up about money or simply because of the perceived cost of advice.
If you feel like you need help, don’t shy away from it this year. You could ask family and friends for their input, or use one of the numerous free resources online such as Citizens Advice or The Money Advice Service to get extra support.
For those approaching retirement, seeking professional advice is even more important, especially in light of the pandemic which has changed the circumstances and potentially retirement plans for many.
Retirement Advice from Standard Life is an affordable solution that helps people make the most of their life savings, offering personalised financial planning recommendations for both now and the future.