The festive season will have been and gone before you know it, and whatever you’ve done with your year – got married, started a family, begun a new career – you’re now at the stage where you have to look your resolutions in the face once more.
Every January 1st, millions of people from around the globe resolve to save more money – it’s one of the most common lifestyle goals. Every December 31st, most of those people will acknowledge that they’ve failed, claiming that it wasn’t really a resolution after all; not a proper one, not really. The truth of it is that 66% of New Year’s resolutions are broken within a month of being made, with only 14% seeing it through the entire year. The good thing is, that with financial promises, it’s not too late to buck that trend.
If you began 2017 with the aim of spending less money and saving more for a rainy day, you still have time to start. And with a little careful planning, you might even be able to make up for lost time, boosting your coffers to a healthier level than they were at the beginning of the year by the time that the fireworks start.
OK, well, that sounds good, but where to begin?
How to Boost Your Personal Finances Before the New Year
Self-Assess. While the disorganised self-employed amongst you will currently be grinding their teeth and pulling their hair at the use of the dreaded phrase, in this case, we’re not using ‘self-assessment’ to refer to your tax return – although getting that in on time is certainly one way to prevent unnecessary expense! Rather, before you can start putting your finances in order, you need to be able to understand exactly what your financial position is. So, rather like you would do when applying for a mortgage, sit down and make a list: all incomings, all outgoings, all savings. The first and last are important, but it’s the piggy in the middle that really matters here, so be completely honest; it’s only yourself that you’ll be fooling. It may look bad on paper that you spend £30 per week on coffee, but a venti latte for breakfast and caramel macchiato with lunch soon adds up, and if you’re going to make changes you need to know exactly where those changes can be made. Once it's all down on paper it’s easier to take control.
Automate Savings. One of the problems with saving money is that the very best intentions become completely worthless unless you remember to act on them. For a lot of people, not saving isn't a deliberate act, it's merely that they forget to physically move the cash from their current account before it disappears on the weekly shop. Automating your savings is quick and easy: just set up a standing order between your current account and your savings account/provider, and the amount you choose is painlessly moved on the day you choose – pay day is usually the most practical –before you've even noticed it's there, let alone missing. From there you’re free to decide what to do with it at leisure; a traditional savings account, or investment, like P2P loans through FastInvest. Whichever you decide, even £5 per week quickly adds up, if you look after it carefully.
Cut Unnecessary/Unused Subscriptions – If the thought of not missing even a few pounds from your pay packet seems laughable, there are plenty of ways to liberate them. One of the most obvious, and yet still one the things that people are least likely to do without prompting, is cancelling unused subscriptions. It’s been calculated that Brits waste £37 million on unused gym memberships; that’s as much as £500 per year – or 166 venti lattes per person! Bad as that is, the gym is not the only place that we throw away money. We pay for television services when we only watch shows available on Freeview. We pay £8.99 per month to Netflix, for the privilege of watching one film, quarterly. We order Graze and Simply Cook boxes, and let them pile up in our cupboards. In total, it's estimated that as a nation we waste in excess of £448 million per month on subscriptions that we don’t use. Everyone has something, even if it’s just that copy of Gardener’s World or Empire, that you like the thought of but never actually read. Think about it. We’re looking at you.
Invest. If you’re saving already you’ve made a really good start, and if it didn't sound patronising we'd congratulate you. But while saving is to be commended, with interest rates being painfully low – after months at 0.25%, the Bank of England is apparently due to raise them to a breath-taking 0.5% … steady now, contain your excitement – all you’re really doing is not spending your money. The way to make it work for you is to invest. There are numerous ways of doing that, but at FastInvest we favour the P2P (peer to peer) loan. It can be short term. We offer a buy-back guarantee. But at the moment, what we do better than anyone else, is offering an interest rate worth having. With an ROI of 9-13%, even a small sum can bring back worthwhile gains. Put £1,000 in a standard bank account and you’ll get £2.50 in return. Put it in the current top-rated ISA and at the time of printing, you'll receive 1.5% interest, or £15. Invest with FastInvest and you could gain between £90 and £130.
Spend Nothing… OK, so this might sound a tad unrealistic, but we’re only talking one day a week, which is surprisingly easy once you set your mind to it, and can actually become a fun family challenge. If you have a season ticket, your transport is already covered. Rather than buying lunch, pack up something that you’ve already got in the fridge, along with a flask of coffee. For entertainment, take a book or magazine from home. Bored? FaceTime or Skype a friend for an overdue catch-up. The little bits add up and you’ll be surprised how much extra cash you have at the end of the month with just one weekly day without opening your wallet – and if you invest those savings in a FastInvest P2P loan, you could get even more for your efforts.
The No Card Trick. The beauty of credit and debit cards is that they’re simple. You want something; you don’t even need to remember your pin anymore, if it’s less than £30. Breezily waving your card in the air, you can rack up a fortune without even thinking about it. Handling money, physical coins and notes, makes you take stock of what you’re spending, which inevitably means that you spend less. If the idea of being cardless terrifies you, leave a spare in your locker at work, that way you’re never far away in case of emergencies.
Invest Change. If you’re carrying more cash, you’ll have more loose change. Rather than hoarding it in a penny jar, try investing it. With FastInvest you can invest from as little as 1 Euro at a time. OK, so that’s never going to make you rich, but gaining an extra 9 to 13 cents for every Euro invested is better than doing nothing.
Consolidate Debts. Everyone knows it, but it’s still worth reiterating. The fastest way to lose money is to ignore your debts. If you’re just paying off the interest on multiple cards and loans, then you’re throwing money away. Consolidating all of your debts in one place – usually with a single loan or interest-free credit card – it’s not only easier to keep track of what you owe, but it allows you to save money and actually start paying off the debt, rather than just the interest. Imagine that!
Experts now believe that stopping impulse spending can help to improve mental health. And it's long been thought that saving money can help to make you feel happier, not just because you'll have the extra money if you need it, but because you'll have taken control and done something positive. Whether you’re saving with a goal in mind – a holiday, a car, redecorating the house, or putting the kids through university – or saving for a rainy day, having a financial buffer takes some of the stress out of life, and surely it’s never too soon to do that?
In 2016, a study by the Money Advice Service revealed that more than 16 million Brits had less than £100 of savings to their name. What do they do in the case of emergencies? Go without, or get into debt. Begin now and you'll certainly end the year better off than you are at this moment.