If you’re like most people, January this year didn’t really count. You may have started 2022 with big goals and resolutions, like getting your finances in order, but with everything going on in the world, you’d be forgiven for your motivation promptly veering off track.
But the good news is, new year’s resolutions barely stick anyway. You don’t need that fresh energy and enthusiasm of the new year to achieve your goals. Instead you just need simple strategies that actually work, with easy steps to put in place.
Want 2022 to be the year you get on top of your money? Here are five common financial resolutions, plus how you can make them stick:
Pay off credit card
Having credit card debt can be stressful, especially when you’re trying to pay it off. Given the high interest rates it attracts, it can feel like you’re never actually getting ahead.
To start, make sure you’re meeting the minimum monthly repayments, so you’re not paying any extra in fees or interest repayments. Make sure you’re paying off as much as your budget will allow each month—your money will most likely go much further paying off a high interest credit card debt than going into a savings account. If you have multiple credit cards, make sure you are paying off the debt with the highest interest rate first. Also try and avoid spending any more on your credit card. It may help to leave the card at home so you’re not tempted.
Create a budget
The word ‘budget’ may make your eyes glaze over, but understanding what you earn and spend is the most powerful tool at your disposal to make positive change.
Write down all of your fixed monthly expenses, like rent, loan repayments, utilities, phone bill, gym membership or TV streaming services. Add them up, then deduct that amount from your income to determine how much you have leftover for all your other expenses. Once you have that figure, you can set clear guidelines for what you can afford to spend. You may like to set yourself a limit of what you can spend each month, or even make a goal of how much you’d like to be able to put into savings at the end of the month.
Being on a budget doesn’t mean forgoing all fun and saying no to everything you want to do. Instead it’s about being aware of your financial position, and spending within your means. This can also be a great exercise to determine any areas where you can cut back a little and make extra savings.
To help stick to your budget, you could keep different bank accounts: one for your weekly spending allowance, and one for your savings. Some bank accounts even allow you to categorise your money even further, and you could have different allowances such as for groceries, petrol, eating out and coffees, or entertainment.
Save money
Once you’ve freed up some money in your budget to save each month, it’s time to put it away in savings—and we mean away. Keeping your savings in with your spending money can prove very tempting. Open a separate savings account that you don’t necessarily see or access all the time. Ideally, get a savings account without a bank card, or don’t carry that card with you, to make it that little bit more difficult to access the money.
Another way to save easier? Set up automatic transfers from your transaction account into your savings account each month, so you’re saving without lifting a finger.
Be more mindful of your money
Are you the sort of person who generally has a good idea of how much money is in your account at any one time, or are you crossing your fingers every time you tap and pay, hoping there’s enough in there to cover your morning coffee purchase? If you fall into the latter category, it’s time to get friendly with your bank account. Most banks offer an app which makes it easy to access your account on the go and keep a close eye on what’s going on and out of your account. If yours offers the functionality, turn on alerts when any money leaves your account, so you’re constantly aware of what you’re spending.
Make your money work better for you
Not all banks or bank accounts are equal. When was the last time you reviewed yours? Things in the world of financial institutions change all the time, so if it has been a while, you may not have the best products for your circumstances. A great start can be to give your bank a call and see if they offer a newer product which may work perfectly for your personal circumstances. You can also easily research other institutions online and see what banks are offering. By changing to a bank or product that better suits your needs you could reduce the fees you pay, reduce any interest you owe, earn more interest on your savings, get better financial support, or have access to your money which better suits you.
And make sure you’re making the most of any features of your accounts. For example, if you have an offset account for a mortgage, make sure you have the bulk of your money in the account to benefit from the highest possible interest rate offset. In this case, your money will work much harder for you in the bank than it will as cash in your wallet.