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22 January 2024 | Comment | Financial advice insights | Article by David Hulse

10 financial resolutions for the new year

1. Ensure you have an emergency fund

This financial new year’s resolution top tip is slightly catch-22: those with sufficient incomes will probably already have a decent level of savings stashed away should there be any unexpected financial potholes in 2024.

Those who struggle to balance their personal payments may not feel they have funds to save for an emergency. With too much going out every month, how on earth do you save?

It’s not easy and will take planning and willpower. The key is putting away small regular amounts that are not so easily missed, rather than committing to large but unrealistic monthly amounts.

First ensure that you have a separate account for your savings and one that is easily accessible should you need to withdraw funds at short notice. Higher yield savings accounts may not allow you to do this or have penalties for early withdrawals.

Next, set up a small amount, roughly £10 per week for those on the tightest budgets, to automatically transfer into your savings account.

Then, the absolutely critical part – forget about it. Forget this fund even exists, until you look at it in December and see you now have £480 saved!

2. Reassess your utility providers

Inertia is the friend of all utility services, as they tend to rely on slowly increasing your annual premiums without you noticing.

Don’t let those premiums creep up stealthily – use a comparison site or do your own research, then ask your current provider to price match the cheapest alternative or switch.

This is one of the most satisfying money-saving resolutions, when you review just how much you’ve managed to save each month.

If you’re on a mortgage rate that’s coming to an end soon, be sure to speak to a mortgage broker to help you find a new, ideally better, deal.

3. Save for retirement

For some, the level of contributary pension can be a deal breaker when deciding on a new employer. For others, a pension is an unwanted monthly deduction that, unlike national insurance and income tax, is optional and therefore ignored.

Whatever your age, putting in place the right pension should take top priority in your personal finance resolutions for 2024. With so many options and providers, this is one area that really benefits from the knowledge a financial adviser brings.

If you take one thing away with you from this article, it’s to make the time to sit down and think about your finances. Saying ‘I’ll do it when I get the chance’ often translates to things never being achieved.

4. Create a budget – and stick to it.

Make 2024 the year that you stick to your budget by putting some helpful steps in place. If you share your financial decisions with someone else, like a partner or family member, then discuss and agree a budget together and write it down.

The same goes for if you’re making all the decisions yourself – write your budgets down and keep them somewhere that they can be easily referred to.

The key to creating a budget is to make it realistic. Work out your income versus expenditure, taking account of any known changes to your finances for 2024.

Keep things simple by setting up direct debits for all your regular, fixed costs and factoring these into your budget.

When it comes to variable costs such as gas and electric, food, petrol etc, look back on your previous payments and calculate the mean cost over the last 12 months, taking into account any price inflation. If you’re aiming to spend less, then set a lower budget and stick to it.

If you would like further financial planning advice, please contact our team of independent financial advisers.

5. Plan for knowns, allow for unknowns

Or in other words, expect the unexpected. Inflation in the UK recently hit a 10-year high, with the Bank of England reacting by increasing the UK base interest rate.

All of the above indicates a year of price increases to both businesses and end-consumers.

6. Optimise your portfolio

Your new year’s financial goals should also include optimising your portfolio. Your investment mix for such an uncertain period should be diverse.

With predicted fluctuations and market movements, regular assessments of your investments will be crucial. What looks like a hot gain in January may be dead loss by September.

7. Prepare your will

Preparing your will is easier than ever these days and most financial advisers will be able to put you in touch with a solicitor who can help you with this often-overlooked part of personal finance.

If you have any assets and dependants, then a short amount of time now will avoid a lot of wrangling later on. It will also give you peace of mind that your wishes for your estate will be carried out should something to happen to you.

8. Get your property valued

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 2024.

9. Pay yourself first

If you’re self-employed, always try to pay yourself first. Often, leaving your own salary payments until all other outgoings are sorted can mean you end up not getting paid.

As well as paying yourself first, you should also put away sufficient funds to cover future expenditure including holidays, sickness, and a pension.

10. Clear your debt

As previously mentioned, interest rates in the UK have just risen, and while they are still reasonably low, the predictions for 2024 are for a continued trend of inflation controlling high interest rates.

With this in mind, now is the time to start considering your debt burden. This links into budgeting nicely as you may need to make sacrifices in order to pay down this debt.

Again, make time to sit down and look at your outgoings and see where discretionary spend, such as a Netflix subscription or take-away orders, could be exchanged for funds to pay off debts over the year.

You may also wish to look at consolidating debts into a single payment at a potentially lower interest rate.

Author bio

David Hulse

Head of Hugh James Independent Financial Advisers

David Hulse heads up the Hugh James Independent Financial adviser team. An experienced adviser looking after personal and professional clients based all over the UK from London to Edinburgh and closer to home here in South Wales.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.


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