Come January what are the best New Year’s pledges we can make to transform our money and our lives? Here are the Quids in! top five promises…
Every day check your bank balance. This isn’t just about knowing where you are, although that’s step one. It is also about stopping to think about money more often. Better to get any surprises before they’ve mounted up as it’s easier to make up for the little setbacks. For people with Direct Debit payments going out, it’s essential to know what has come in and gone out and when. If you’re moving onto Universal Credit, this could be a new discipline because rent money will come to you first and you want to know it’s gone on to the landlord like clockwork. For the first few months on UC, it’s worth checking what’s come in is what you were expecting and the date it’s paid.
If you cannot check your balance easily, change how you use your bank account, registering for daily text alerts or telephone or online banking. If you have to visit a cashpoint,
change your account or bank, even.
Set targets for everything: Daily and weekly spend, what the kids can have, cutting down travel costs by one trip a week for example. To start, write down everything you spend using cash or cards – from stamps to petrol in the motor. The main thing is to record it all, adding anything on your statement you didn’t include like bills that go straight out of your account. You see exactly how much you’re spending on different items in a week and also find out what your total daily and weekly spend is. Once you know where you are, you can aim to trim off any fat and set daily and weekly limits. Be strict with yourself at the start, in case you need to go easier later on. You will only know what you can achieve if you really go for it. Even the smallest goals make a difference. Remember, each pound you cut back per week equals more than £50 a year, towards Christmas or a holiday!
People who are on top of their money will tick this off without thinking but many are drowning in unopened mail, let alone debt. Since money was invented it has been part of the human condition to bury our heads in the sand but even ostriches who shut their eyes and hope for the best still look like lunch to a hungry predator. Open your bills. Every debt adviser has met people who feel they’re sinking and turn up with a bag full of unopened envelopes. It doesn’t take a doctor to tell you what that will do to someone’s state of mind. We might owe ten people money but the bag’s full of 200 envelopes – so 20 copies of pretty much the same letter. We only need one of each, so let’s shed 190 bits of bad news in one go! Like checking your bank balance every day, there’s more to this than facing the pain. There is no way forward without taking this step. Clear the way and make a pledge to get some help to get it sorted.
A fool and their money are easily parted but the secret to wealth is the reverse is also true. The richer people are, the cannier they are about spending cash. Shop like them, like there must be a bargain to be had. Shop around or find it online and ask the local seller to match the price. It may be on a smaller scale than the rich and famous but if a bag of peas is cheaper at Lidl than Tesco, (and it doesn’t cost more to get there), switch. Take your money seriously and shop around for everything from the cost of your gas supply to the loyalty points you can earn and spend wherever you shop. Invest now to save later, buying loo rolls and tins of beans in bulk. Almost everything is cheaper per item when sold as a multi-pack. And act like you’re entitled because you probably are due some help, whether that’s unclaimed benefits or a bit of advice. ‘Wealthy’ is a state of mind.
All but the very worst off people might find some way to set aside a couple of quid on a regular basis. If you can resist temptation, emptying small change into a jar on the mantlepiece will grow before your eyes and get you into the savings habit. Putting the money aside for each cigarette, coffee or takeaway you say ‘no’ to will soon add up without feeling like a hardship. For the digital-minded, widgets like Lloyds Bank’s ‘Save the Change’ or the Moneybox App, attach themselves to bank cards and round up spending to the next pound, diverting the difference to a savings pot. Experts say we should all have at least £300 set aside if we possibly can but £500-£1,000 will cover most financial shocks, like a car breakdown or family emergency. But if money’s too tight, becoming a regular saver with a credit union where even just a few pounds a month could qualify us for a cheap loan should the need arise, could be our next best bet.