We’re all guilty of setting the bar high with our New Year’s resolutions, and sometimes it’s easy for them to backfire before we’ve even reached the end of January!
But, sticking to these financial resolutions will help see you into 2016 with a bang and put you in good financial stead for the future.
1. Check your credit history often
If you’re not already a regular checker of your credit report, there’s no better time to take control of your finances than in 2016. Keeping on top of your credit history is really important, as it can help flag up any issues swiftly and point you towards any mistakes that may need rectifying – it can even help you spot fraud or identity theft.
No matter which lender you apply to, your credit history is always taken into consideration when you apply for credit – whether that’s a loan, credit card or a mortgage.
2. Be a responsible borrower
Missed, late or partial payments and spending over your agreed credit limit can have a disastrous impact on your credit history and cost you dearly in fees and charges. So, if you’re looking for a New Year’s resolution to truly make a difference to your life, being a responsible borrower is vital.
There are loads of ways you can improve your borrowing habits, but ensuring you make all your payments on time is the most important. Setting up a Direct Debit or a standing order to automatically pay your bills means you shouldn’t have to worry about forgetting to pay on a certain date. Where you can, try to schedule your payment dates to land a few days after your payday. This way you’ll reduce the risk of running out of money by the time you need to pay your bills.
3. Don’t spend beyond your means
It might be tempting to charge into the New Year with a frivolous spending spree, but if you want to secure a stable financial future for yourself, it’s best to only spend what you can afford. Spending more than you have coming in will almost always catch up with you, and can cause serious financial difficulties at a later stage.
Whether you’re eating into your overdraft or splashing out on your credit card, try and think of how you’re going to repay what you’re spending beforehand. Ask yourself whether you can afford it, and whether you really need it. If the answer is no, it’s better to try and save instead!
4. Start saving
Any penny saved is a penny that can be used towards something you enjoy or something you need in the future. Regardless of whether you can only afford to set aside £20 or £200 each week, it all adds up. Paying for things with savings is the cheapest way to make purchases, and you won’t have to worry about repaying anything.
Plus, having an emergency pot of savings is really important so you’re not left struggling should something go wrong – like your boiler breaking down a week before payday.
5. Get yourself a budget
It may be time to celebrate as we head into the New Year, but drawing up a budget doesn’t have to induce groans and moans – it can be an incredibly useful way to help you keep in top financial form.
Having a look at your income and outgoings by using your bank statements for 2015 is a good place to start. You’ll be able to see where and how often you spend money, and whether there’s any places you could cut back on. Sometimes, just having your bank statements in front of you help you to notice areas where you don’t realise you’re spending as much as you are. From here, it’s worth circling the places you could cut back on and adding up how much you’re spending.
Once you’ve totalled the potential cutbacks, consider the goals you’ve got for the year ahead – whether this is places you want to travel to or items you’d love to own – and have a look at where the money might be able to go towards. You might be surprised at how close to achieving your goals cutting back will get you.
Disclaimer: All information and links are correct at the time of publishing.