If your finances ended in a better shape than you expected- Congratulations. It is challenging for anyone to grab a hike in ever-increasing inflation and shifting economic modules. It is unsurprising if your household bills and other liabilities are all-time high.
The existing economic scenario reveals a different and unpredictable financial turn. Not only savings but investments suffered drastically this year. An unappetising increase in taxes implies- planning is essential.
The new year is a great time to review your finances and streamline them for maximum benefit. It grants one to improvise on short- and long-term goals. It can be anything from buying a home or planning a dream international holiday.
The blog lists some financial resolutions that you can improvise this 2023. If you are confused and want to start it right away, read ahead.
Which financial resolutions should you stand by in 2023?
In the wake of horrendous price hikes and subsequent financial carnage in 2022, everyone wants to grab the right financial tandem.
As per Senior Personal Financial Analyst Sarah Coles, “While planning financials, sorting out debts comes before anything else.” She adds, “It helps plan investments that further help the financial planning”. You can set up direct debits for many debts with high-interest rates. It will help you clear debts swiftly. Here are other financial resolutions to standby in 2023:
1) Save more money
As per the expert, you should have separate direct debit and savings accounts. It not only helps you build more interest but also helps you manage your finances better. The financial advisor stress on “paying yourself first”. She believes that money goes out as soon it hits the account.
Thus, it is important to fix an amount to save every month. Calculate the exact costs to pay off the dues and other household expenses/ liabilities. Save a percentage of your income towards savings. Make it a habit.
Apart from that, compare the best rates on savings accounts and switch if needed. Compare everyday savings accounts and cash ISAs. You can compare these on sites like Moneyfacts and Go Compare.
You should also save for 6 months in an emergency fund. It would help you get past the financial troubles in situations like- unemployment or furlough.
2) Mark dates on a calendar for bill payments
Whenever new household bills knock on the doors, analyse the bill amount before paying. Is it authentic or too high to believe?
Moreover, as per research, one does not need to pay a “loyalty penalty” on car or home insurance premiums. If you always pay that, confirm it from the provider.
You can budget the rest expenses by marking them on the calendar. It would not only help you pay timely but also avoid respective penalties. Check price comparison websites to get the best deals on car insurance, home insurance, subscriptions, and mobile bills.
Here are some other ways to be on top of your bill payments:
As per Moneyhelper.co.uk, “You should be on top of the bill payments to ensure a stress-free lifestyle.” Here is how you can pay bills in other ways::
- Set up a direct debit
- Pay through online or mobile banking
- Top up a key card for electricity and energy bill payments
- Post office
- Pay by a cheque
- Paygo swipe card
3) Identify the untapped pensions
How many jobs have you changed until now? According to a fact, “one changes jobs seven times in working lives.” It may come as a shocker to you, but you moved without claiming your pension dues there. It is easy to lose track of the same. It is the reason there exists around 2.8 unclaimed pensions. As per Pensions Policy Institute, “the average lost pension of people aged 55-75 is around £16,004.”
While it may be a grim chance of having lost pensions, it may be ideal to check it once. If you cannot track any papers, check on Government’s Pension Tracing Service or call your old employer to enquire.
Combining different pensions pots makes it easy to manage, reduces admin costs, and improves performance. Before availing of any pension, identify the maturity age. You may lose interest earned if you claim it before maturity.
- You can claim your pension by:
- You have to apply 4 months before the maturity age.
- Request the backdating date of the pension. The maximum pending or backdate pensions are 12 months old. If you have older than that, you can claim that.
- You will receive an invitation letter in 2 months. If you don’t receive the same, contact Pension Service.
- You can even claim it online on Gov.co.uk or receive it by post by contacting the authority there..
4) Clear off your debts one by one
As per the Money Charity stats, “The average person in the UK has £3895 of average debt.” Owning debts may impact your financial goals and lifestyle. If your debts are not moving or remain unpaid for a long time, it also impacts your credit score and attracts penalties. To ensure healthy financials:
- Identify the debts
- Prioritise them
- Begin with the debt that may cost you your belongings like home, jewellery or car.
- Next, focus on expensive debts like- mortgages, car loans, payday loans, student loans, home renovation loans, etc. Debts with high-interest rates consume most of your credit report
- Move your debts to a 0% balance transfer card. It helps you clear debts faster.
You may take these steps to manage and pay debts smartly. Apart from that, one of the best ways to merge debts and save interest and money is by getting debt consolidation loans for a fair credit score. A debt consolidation loan helps you merge over 5 debts and pay them off with a single lump sum monthly.
It also helps you manage the payments without missing any. Always analyse the practicality of the debt consolidation loan before availing. If you have a low income and credit score, it may not be ideal for you.
5) Improve or build your credit score from scratch
There is no good time to review your finances and credit report. You can review it weekly or monthly as per your finances or debt payments. Your debts affect your credit score and prove an obstacle to gaining better interest rates on other loans.
If you are worried about confusion in bettering your credit score, the below tips may help you.
- Report any mistakes or errors on the credit report
- Make sure your residential and business address is up to date
- Pay your bills on time
- End financial associations like joint accounts with others
- Avoid filing multiple applications at once
- Keep your rent information up to date
- Avoid expensive credit repair companies
These tips may help you build credit from scratch. Apart from these, taking certain loans can help you build a score. If you share little idea and want to know about these in detail, contact LoansForever. The registered direct lenders and experts help individuals with needed cash help and provide expert tips to improve credit scores with loans.
Before drafting financial resolutions, reflect on your goals. Improvise your debts and clear these with a tested strategy. Taking some steps to where you want to be is better than taking none. It would help you gain financial intelligence and help manage debts and finances better.