2022 undoubtedly wreaked havoc with many of our finances with the cost-of-living expenses rising and interest rates causing uncertainty in the mortgage market. So, with a New Year now underway, it isn’t too late to set our New Years’ resolutions for your finances to help combat the ongoing cost increases. Check out our handy list of 10 Financial New Year’s Resolutions that could help shape your finances for 2023.
1. Create an emergency fund:
It may seem difficult to envisage pots of cash stashed away while many of us our tightening our belts, but if it’s possible to squirrel away even small amounts to fall back on should you need it, this could provide comfort if tough times come calling.
2. Reassess your utility providers
While reassessing gas and electric providers may be a little out of reach while the prices continue to climb, other outgoings can be reassessed. From your TV packages to your broadband deal and even your mobile phone contract, when the current agreement ends, it’s worthwhile looking around at what other options are available. Sadly, loyalty is not often rewarded and new customers may see better introductory deals, meaning looking at alternate providers could save you a fair amount of money.
3. Plan for Retirement
If you are only in your 20s or 30s, or even into latter decades, retirement may feel an age away, but preparing your finances to accommodate a lapse in the income your used to when the time comes is essential. Sitting down and assessing your pension(s) and even looking to consolidate multiple pensions into one spot can help put your retirement finances in line ready for the years ahead.
4. Clear those debts
Many of us inevitably face debts following Christmas spending, from credit cards to loans and even store cards, it’s easy to accumulate debts through the seasonal overspend period. Look to overpay on your minimum repayments where possible to help clear the debts that bit quicker. Or even look at Debt consolidation options where you could secure an alternative loan to pay off the existing debts, creating 1 simple repayment monthly, rather than several spread out debts.
5. Plan for the expected, allow for the unexpected
Making compensations for the price rises is something we can plan in to our budgets for the year ahead, but it’s important to ensure we expect the unexpected. What if rates rise? What if you lose your job? What if there is a resurgence of the pandemic? The unknowns could have significant impacts on our finances so it pays to be prepared. Have you considered income protection? Or repotting money into higher interest rate accounts? There are many ways to prepare should the worst happen- do get in touch to discuss further options.
6. Prepare a will
As with planning for retirement, planning a Will can seem unnecessary and a little uncomfortable, but if you have assets or loved ones to provide for after you’re gone, a Will is an essential part of forward planning. It is widely considered that many Wills are not fit for purpose, if they’re in place at all, so it is worth revisiting yours even if you have one in place, to ensure it is still fit for what you’d like it to do. *
7. Get your property valued
The last few years have seen house prices increase considerably, and although the rise is slowing, it could be worth taking a look at the current value of your home. Whether you own your home with a mortgage or outright, it’ll stand you in good stead for your new-year goals to know how much equity you have in your property.
Knowledge is power and knowing exactly how much equity you’re sitting on can only help inform your personal finance decisions in 2023.
8. Improve your Credit Score
When it comes to any significant financial considerations, your credit score is likely to feature in whether you’re able to go ahead or not, so it pays to have it up to scratch. Lenders will use your Credit Score as a report on what your typical financial behaviours are and how they expect you’ll behave with your finances in the future. In simple terms this means your past could shape your future financially. So keep your financial behaviours in order to allow yourself future options for the year ahead.
9. Is this the year to invest?
Developing a portfolio of investments could be on your 2023 to-do list. Looking into property or stocks and shares could be where you choose to invest money you may have, but it could be important to secure advice on investing if that’s something your new to. If you’re a seasoned pro, consider what is likely to perform well among periods of uncertainty as we see costs growing.
10. Refine your spending habits
When buying anything, the first thing you should be asking yourself is whether or not you actually need what you’re about to buy. If the answer is no, then put it down and walk away. This can be tricky, but once you get used to it, you’ll find your spending habits starting to change naturally. Take a look at all your current subscriptions and cancel any that you don’t use or need. You can also unsubscribe from marketing emails to remove the temptation of browsing new offers, and leave credit and debit cards at home if you don’t need to shop while out.
*Wills and Estate Planning are not regulated by the Financial Conduct Authority