Younger adults are more likely to make a resolution, with two-fifths of 18-to-34-year-olds (40%) saying they’ll do this. Two thirds (66%) of people say they won’t make a New Year’s resolution, with the rest (12%) saying they’ve not decided.
The most popular New Year’s resolution is becoming healthier. Over a third (36%) of those who intend to make a resolution want to get healthier in the new year, while 33% plan on exercising more. Others are focusing on improving their financial health by setting money-related resolutions. Around a quarter (21%) plan to start saving or save more money, while others want to spend less money (15%) and pay off debts (13%). One in eight (12%) say they want to spend more time with family and friends – the same percentage as those who say they want to start to invest (12%).
While many people make New Year’s resolutions, not everyone sticks to them. But it is often easier if people aim for a specific goal and half (52%) of those planning to make a resolution say they will set a target to help with their motivation levels. Others plan on sharing their resolutions with family and friends (28%) to help keep them on track, while around a quarter (24%) will turn to technology and use an app to chart their progress.
Sarah Pennells, Consumer Finance Specialist at Royal London, said:
“It seems that making a New Year’s resolution isn’t the annual event we imagine it to be, with most people telling us they won’t be making a resolution this year. It’s good to see that one in five of those who plan on making a New Year’s resolution want to start saving or save more money. Having some savings – even a small amount – is important so you can cover those emergency costs.
“Fewer than one in 25 wanted to review their pension. I think that’s understandable because for many, retirement will seem like a long way away. But it is important to think about whether you’re saving enough to live on when you stop work, especially as the state pension is only around £9,300 a year – which isn’t enough to give you a good standard of living in retirement.
“Managing your money can be tricky if your budgets are squeezed, but there are ways you can bring your spending under control. This year was a tough year for most people’s finances, but the New Year provides the perfect opportunity to re-set and become better at managing your money. Taking control of your cash doesn’t have to be mission impossible and by following these steps, you can keep your money on track and start building your savings.”
This year was particularly hard for people’s finances with many affected by a reduced income or needing to take on more debt, but those looking to make improvements and commit to new financial goals can benefit from some simple tips below.
1. Find out where your money’s going
Start by finding out where your money’s being spent. It sounds obvious, but most of us don’t realise exactly how much we’re spending each month – and what we’re spending on – until it’s laid out in front of us.
Keep a spending diary for a month where you make a note of everything you spend, or monitor things using your phone. Monitoring your money can help you build a picture of exactly where it’s going and you can use an app to track spending.
2. Go through your statements
Grab your last three bank statements and credit card bills and spend some time going through them, highlighting any areas where you think you’re spending money unnecessarily or spending too much. This could be on anything from a top of the range broadband package that you don’t need, to a mobile phone contract where you’re paying for data you don’t use. Also look out for any subscriptions and cancel any you don’t really use to save yourself a bit of cash.
3. Break any bad habits
Take a look at your spending and see if there are areas where you’ve fallen into bad money habits, such as buying a coffee or lunch out every day. Cutting that takeaway coffee to once or twice a week, or preparing a few of your meals at home, will add up to meaningful savings over a year. Reducing your spend by just £2 a day could save you more than £700 a year.
4. Draw up a budget
Budgets aren’t just for the Chancellor! Drawing up a weekly or monthly budget will help you get your finances under control. There are plenty of templates online to get you started, like the MoneyHelper budget planner.
Alternatively, budgeting apps can also be used to plan what you want to spend and keep track of it.
5. See if you can pay less interest
If you owe money on an expensive credit card, it may be worth considering whether you can transfer the balance to a credit card charging 0% interest. Although these cards are interest free, you will normally be charged a balance transfer fee of between 1 and 3% of the amount you transfer. Because you won’t be charged interest on your balance, more of your money can go to repay what you owe.
These cards aren’t right for everyone, and it’s important to make sure you can pay off your balance by the time the 0% interest deal runs out.
6. Get help with unmanageable debts
If you are struggling to pay for the essentials, you are using one credit card to pay off another, or your debts are causing you worry, then contact a debt advice charity. They will be able to give you help with your debts, free of charge. They may also be able to tell you whether you are able to claim any state benefits. The main debt advice charities are StepChange, National Debtline and Citizens Advice.
7. Check your credit report
Your credit report is a snapshot of the information that’s on your credit file. This information is used by companies you already have a credit agreement with, and lenders you apply to, to make decisions about how good a risk you are. You have the right – by law – to see a copy of your credit report free of charge. It’s worth doing so you can see what information lenders you apply to will be able to see, and so that you can correct any mistakes you find.
There are several different credit reference agencies, but the main ones are Equifax, Experian and TransUnion.
8. Start a savings habit
Once you’ve started managing your money and you’ve cut back on unnecessary outgoings, you should find you have a little more left over each month that you can start saving. It doesn’t have to be much – the smallest amount will start to add up over time.
Set up a standing order for just after you get paid so you ‘pay yourself first’ by transferring some money into your savings account.