11th January 2019 at 2:49pm
By Elle Tucker
The tree has been recycled, the house is back to normal now that all the Xmas decorations are down – and, if you’re like most people, you’re starting to focus on the year ahead.
No wonder – many of us spend more than we plan to over the Christmas period. Research* shows that the average spend is £726 for UK households and around 40% of people make sacrifices to pay for festivities, including cutting back on heating, clothes and food shopping, taking on an extra job and even selling belongings.
Make resolutions that will last in 2019 – and beyond
But in spite of the overspending, New Year’s resolutions are often focused around health and fitness, which although admirable and important, often aren’t kept for very long.
Our article Could 2019 be your best savings year yet? shared research by Strava, a social network for athletes, which showed that in 2018, Friday 12 January saw the biggest drop in activity by those using the app.
That’s less than a fortnight of good behaviour before those old habits started to creep back in.
So maybe those “new year new beginnings” messages we get every year about making resolutions to get our finances back on track are worth listening to after all.
It’s easy to set up a direct debit to a new health club, but if you’re not actually using it by the time March arrives, the money might be better directed elsewhere.
Here are our seven ideas for a fresh financial start in 2019. And they don’t involve a spin class:
1. Do your groundwork first – and if necessary get some expert guidance
Getting out of any financial difficulties can be easier said than done. If it happens, first talk to your bank, or Citizens Advice which has useful information on ways to manage debt and money – so that you take back control and don’t struggle on alone.
For the younger generation, parents can sometimes help too – especially mum, according to Guy Shone, CEO of Explain the Market, in Standard Life’s new report on millennial saving.
The report found that families are having a major impact on the financial futures of 18 to 35-year-olds with many still preferring to use their mums for financial advice.
2. Give your bank account an early Spring clean
Your bank account can be neglected if you don’t get a paper statement so a fresh start might involve tidying it up.
Review your spending over an average three months and check for any free trials that have ended which you’re now being charged for, or subscriptions you no longer need.
3. Get the best deals you can on your mortgage and energy
You might also want to consider making sure you’re on the best mortgage rates or energy tariffs – they can make a really big difference to your monthly finances.
Don’t assume you are on the best deal. Check. It might not take too much effort – and could be well worth it.
Remember though, that as most mortgage interest rates are well below those of credit cards it may be better to pay off other debt with higher interest rates first. And do get some guidance if you can.
4. Start a rainy-day fund
Do you have any ‘rainy-day’ savings? Starting an emergency fund could be a good New Year’s resolution – nobody knows when an unexpected expense might come up, such as an inconvenient car or boiler breakdown. Putting small amounts away regularly could make a large and unexpected bill easier to pay for.
5. Save a bit (more)
With your finances in better shape, why not start saving for the longer term. Perhaps there’s a family wedding around the corner, or you want to save more for your future.
The end of the tax year is sometimes called the ISA season with many people taking the opportunity to make the most of their ISA allowance, which is currently £20,000, before the tax-year end on 5 April.
The good news is that whether you want to save a little or save a lot, the next tax year starts on 6 April, and with it the next year’s £20,000 allowance.
6. Get paid to spend
Have you heard of cashback sites? If you shop online as many of us do, you could use them to benefit from cash rewards when you click through to buy goods or products like car insurance or broadband.
Most of these sites, such as Quidco and TopCashback, work in the same way although there are some differences in fees, bonuses and how your money is paid.
It’s simple to start and could mean some extra money to put towards your savings, so why not register with one or more cashback sites and search for deals that suit you?
7. Invest in your future – pay more into your pension
A new year is always a good time to look to the future, whether that’s getting things sorted, starting to save, or saving a bit more.
Your pension is a tax-efficient way to save for retirement – and if you are in a workplace scheme, your employer will be paying towards your future too.
According to a BBC report, the Office for National Statistics says the average retired household now spends more than £21,000 a year. Experts have recently suggested that ideally we should all be saving into a pension by the age of 25**.
If you want to see how much of a pension you are on track for, you can try our online pension calculator.
Whatever age and stage you’re at, by building up your pension savings you’ll have more to look forward to.
Why not make 2019 the year you sort your pension? You can read more in our ‘What’s so good about a pension’ article.
What are your fresh start plans for 2019?
Elle Tucker is a freelance journalist writing on behalf of Standard Life
Tax and legislation may change and the information here is based on our understanding in January 2019 and shouldn’t be regarded as financial advice. Your own circumstances will have an impact on your tax treatment.
Personal and workplace pensions are an investment, the value can go down as well as up and you could get back less than you paid in.
*Survey commissioned by GoCompare Money, December 2017
** BBC report on Office for National Statistics research into household spending, January 2017