Determining your financial goals is a great starting point for improving your finances, and the New Year is the perfect time to set them. But if you want to face up to the financial challenges that lie ahead in 2023, what are some of the resolutions you should set? We’ve taken some of the most popular financial New Year’s resolutions and offer advice on how you can achieve them.
1. Save more
Easier said than done you might think, particularly given the perfect storm of rising energy costs, soaring inflation and an impending recession. However, with good money management, it is possible to save more. Drawing up a budget, cutting back on unnecessary spending and setting up automatic transfers to a high-interest savings account as soon as your pay comes in are all small steps you can take to boost your savings in 2023.
2. Improve your credit score
If you have a less-than-stellar credit score, now’s the time to take action. Improving your credit score can help to lower the cost of borrowing and give you access to more financial products. Boosting your credit score can be easy, too. Using a credit card for occasional purchases and paying it off at the end of the month, registering to vote and checking that your details are correct on your credit report and correcting any that aren’t can all help to increase your credit score. Check out this guide for additional tips on how to improve your credit score.
3. Create a personal budget
Some people can find a budget restricting, but when your finances are stretched, budgeting is essential. A clear budget can help you understand where your money goes and let you make informed decisions about discretionary spending.
The first step is to write down all your fixed expenses, such as your mortgage/rent, car payments, food bills, utility costs, debt repayments, fuel costs and broadband. Then add in your non-essential spending, such as your clothing, socialising and entertainment. Take all your expenses from your income to see how much money you have left at the end of every month. You can then make decisions about where to trim your spending, if necessary, how much you can save, and how long it’ll take you to achieve your goals.
4. Close your credit and store cards
How many credit cards do you need? The answer really is just one. That allows you to access credit when you need to without relying on cash you don’t have and spending money just to service your debts. If you can clear the balance on your credit cards and close any you don’t need, that’s a great way to start the new year. If you find yourself struggling to reduce the number of credit cards you’re using, or having to tap into new ’buy now pay later’ payment plans this is likely an indicator that you’re over-stretching your budget in a dangerous way.
5. Become more financially literate
Educating yourself is a key step you can take to make your money work for you. Budgeting and understanding the importance of saving and doing so regularly is the first step. Another important lesson is to know how to reduce the cost of your debts through debt consolidation products. And when you have some money behind you, understanding how to invest it wisely can help you on the way to achieving your long-term financial goals.