A survey from Time magazine in 2015 [1] found that a pledge to ‘enjoy life to the fullest’ was the most popular New Year’s Resolution for 2016.
While enjoying life and adopting a healthier lifestyle were two of the most popular goals, financial resolutions featured highly on the list. A third of respondents wanted to ‘save more and spend less’ in the New Year while 27 per cent pledged to ‘pay down debt’ as one of their resolutions.
A second survey by Fidelity Investments [2] found that people who made financial resolutions at the start of 2015 were in better financial shape than those who didn’t make a financial resolution. So what should your goals be in 2017? Here are the top 5 financial resolutions you should make this New Year.
Save more
There are lots of benefits to saving. As well as helping you to plan for special events – a wedding, holiday or new car – making sure that you have savings gives you the peace of mind that you have cash available in the event of an emergency.
Saving even a small amount has huge benefits. As well as the psychological benefits of knowing you have a good attitude to saving, you will be surprised how quickly even a small monthly amount builds up over time.
Putting away a sum every month – perhaps in our Stocks and Shares ISA – is a great way to build up a decent nest egg.
Make sure you and your family are properly insured
Life insurance and income protection are vital if you want to make sure your family are protected. As well as covering essentials such as funeral costs, life insurance could help you to leave your family debt-free. Income protection can provide essential support if you are off work which will help you to maintain your mortgage/rent and other major commitments.
If you don’t have any protection, or you are not sure whether you have enough, make 2017 the year you sort this out once and for all.
Shop around for financial products
2016 research from a leading price comparison website [3] revealed that a quarter of Brits automatically renew their home insurance rather than shopping around to save money.
Failing to shop around costs consumers a collective £37 million each year. If you don’t compare the price of cover you could be paying an average of £59 more than you need to.
If you simply renew your car or home insurance with your existing provider, you’re likely to be paying more than you should. Many comparison services are now easy to use and store your details to make shopping around for cover easy when your renewal is due.
Your financial resolutions could also include transferring a balance on your credit card, finding a cheaper personal loan, or remortgaging onto a better mortgage deal.
Pay less tax
Everyone would love to pay less in tax, but there could be a number of ways in which you’re paying more than you should. If you’re self-employed, are you claiming all the allowable expenses that you can? If you’re employed, are you on the correct tax code and are you correctly claiming for legitimate work expenses?
Making sure you save in the right way can also reduce your tax bill. Make sure you maximise your ISA allowance – perhaps through our Stocks and Shares ISA or Junior ISA – and you’ll ensure that you pay less tax on your savings. Making sure you submit your tax return on time can also help to save you money. You’ll be fined £100 if your tax bill is late and you could end up paying additional interest charges and fees.
Prioritise your debts
Making the most of your money means using the cash you do have as effectively as possible. So, it can pay to reprioritise your debts to ensure you are paying off the most expensive borrowing first.
For example, if you have an outstanding credit card bill, you could be paying in excess of 20% in interest. If you pay off your card debt rather than overpaying on your mortgage, you could pay less interest and clear your debts faster.
Work out what is your most expensive debt and plan to pay this off first.
- When you take out an investment product with us your capital is at risk and you may get back less than you have put in.
- All references to taxation are to UK taxation and are based on Shepherds Friendly Society’s understanding of current legislation and HM Revenue and Customs practice which may change in the future.
If you need help with your financial resolutions in 2017, get in touch. Call 0330 311 1606 or email info@shepherds.co.uk
Sources:
[1] http://time.com/money/4163867/top-new-years-resolution-2016/
[2] https://www.fidelity.com/about-fidelity/individual-investing/new-year-financial-resolutions-make-a-comeback
[3] https://www.moneysupermarket.com/press-releases/uk-homeowners-throw-p37-million-a-year-into-auto-renewal-black-h/
