Looking to improve your financial habits in 2023? Check out our top 10 financial New Year’s resolutions and learn how you can achieve them
1. Check your credit score every month
No matter whether your credit score is already excellent or could do with some work, it isn’t fixed and can change month to month. In fact, your score can even change depending on the credit reference agency. There are three main credit reference agencies in the UK – Experian, Equifax, and TransUnion – and each of them calculates credit scores differently, taking different factors into account. Make checking your credit score with each of the three agencies a habit in 2023 and you can quickly spot any mistakes, monitor any movements, and be completely sure where you stand if you need to make a new application for credit. And it’s completely free – visit ClearScore, Experian, and Credit Karma to find out more.
2. Build an emergency fund
If there’s one financial New Year’s resolution that could give you peace of mind next year, it’s building an emergency fund. Life can be unpredictable, but a healthy emergency fund can help you cope with any financial surprises, whether it’s being made redundant from your job or needing to replace your boiler in the middle of a cold snap. Aim to save at least three to six months’ worth of living expenses in your fund, if possible. You may want to open a new savings account specifically for this purpose and set up a standing order after payday to ensure you’re adding a little more to the pot each month.
3. Create a new budget
The thought of setting a budget might make you worry about cutting back on all your luxuries and being incredibly strict with your finances but, the truth is, budgets that work usually have a little more room for flexibility. It can be tough to stick to a severe budget that doesn’t allow for a treat every now and then. If you want to make living within your budget your New Year’s resolution, make sure you factor in some of the things you love, whether that’s a weekly family takeaway or monthly night out with friends. Writing your budget out can also help encourage you to check your progress regularly and keep it at the forefront of your mind.
4. Pay off a credit card
If the thought of clearing all your debts in 2023 feels like an impossible goal, start a little smaller by looking to pay off one of your credit cards. Not only can this make it easier to tackle your other debts over time, but it can also improve your debt-to-income ratio. If you’re able to use it responsibly, there’s no need to close the card as having the unused credit available could boost your credit score. However, paying the balance down could be a great New Year’s resolution. Start with the card with the lowest balance; you can either pay it off in full or increase your minimum repayments to pay it off more quickly.
5. Explore debt management options
Are you resolved to make this the year you tackle your debt? You don’t have to aim to be completely debt free, but you can resolve to explore your debt management options in 2023. There are several solutions available to suit a wide variety of different circumstances, with both formal and informal arrangements offered. Start by having a confidential conversation with an expert debt advisor. They can take the time to understand your situation and talk you through the different ways you could get back on top of your finances by the end of the year.
6. Audit your expenses
When we start experiencing financial difficulties or see that our everyday expenses are rising, it’s always tempting to ignore the problem, stop checking our bank accounts, and bury our heads in the sand. Start 2023 on the right foot by facing your fears and conducting an expenses audit. Sitting down and analysing your spending can help you spot areas to cut back, prompt you to make lifestyle changes, or inspire you to switch your utility suppliers to get a better deal. You might even find that this exercise encourages you to try something a little more drastic such as having a zero spend week to see just how much you can save.
7. Set up debt repayment direct debits
Late payments don’t only cause stress and lead to demanding letters from your creditors, but they can also affect your credit score. Make paying your bills on time one of your 2023 resolutions and you could feel an instant improvement in your financial and mental health. We know that that’s easier said than done, but you can put steps in place to help. Consider setting up an automated direct debit for each of your regular payments; this can be scheduled on the due date or a couple of days before. If you have disposable income available, you could even set up direct directs to start a new regular savings habit.
8. Increase your retirement fund
If retirement is within reach for you or still a few years off, saving for the future can feel unnecessary when you have everyday bills and debts to cover. However, any amount that you can save now – no matter how small – can make a big difference over time thanks to the compound interest earned. Opting into your employee pension can also help as your employer will often match a percentage of your contributions. If you already have a pension fund in place, consider diversifying your portfolio to see if you can make your money work harder.
9. Talk about money more
Money can be an awkward subject, whether you’re in a strong financial position or struggling. One New Year’s resolution that could help improve your finances and lower your stress levels is to start talking about money more. Sharing your goals and concerns with close friends and family members can help in many ways. They can help to hold you accountable if you’re tempted to overspend or support you by choosing cheaper group activities or implementing a gift spending limit. Communicate exactly what you need, and you might be surprised by how willing people are to step up and help.
10. Set clear financial goals
Making a New Year’s resolution to make a resolution might seem a bit strange but having clear financial goals in place can help you make better decisions with money all year. These goals don’t have to be big, small incremental targets and milestones can help to keep you on track when you’re tempted to start spending. You might want to save for a big holiday, to build your emergency fund, or to get out of your overdraft, for example. Once you have set your goals, write them down and display them somewhere prominent where you’re likely to see them every day like your fridge door or bathroom mirror.
Determined to face your debts in 2023? Our friendly team of debt advisors is here to help. Give us a call on 0161 8260 585 or send a message here
