How to start the New Year right

With the New Year upon us now is the ideal time to reassess your financial circumstances and see where improvements can be made. For many of us the new year signals a time when we think about being healthier and better organised throughout all elements of our lives so why not combine this with a review of your finances. Although the month of January can be a somewhat difficult one for many of us, thanks to the bills which remain from the festive period, this does not mean it is not an excellent time to face your finances head on and see where improvements could be made. January also provides an opportunity for plans to be made for the coming year and our financial budgets set up accordingly. Today then let’s look at an array of different tips which can be implemented right now and help us manage our finances more effectively.

Whenever you are considering a review of your finances an excellent and simple starting point is understanding where your finances currently lay. This means taking an honest and accurate view of what you currently spend and where. The best way to achieve this is via the completion of a budget. A budget is very much like a bank statement in that it is a list of all incomings and out-goings for an entire calendar month. Your budget needs to contain exact figures and not the figures you believe you are spending. This is where your online and mobile banking will be able to help, take the time to refer to a few of your past statements and make sure all regular costs are included. This will mean all living costs, whether that means your rent, board or mortgage, all running costs such as electricity, gas, and water as well as any insurance policies; such as home insurance and car insurance. You will also need to include food as a total figure, for all the amounts spent throughout the month as well as travel costs and any other regular payments, such as monthly subscriptions and clubs. Once you have an accurate and detailed breakdown of your expenditure, sensibly grouped into different areas of spending, specific to your life, this is where savings and financial planning can begin.

Once you have a clear picture of your current expenditure this presents an excellent opportunity to start reducing your spending. It will likely already be clear that you are over-spending in several different areas, whether this be food, days out or even online shopping! Take a cold hard look at what costs could be cut immediately and which could be reduced. Costs which could be reduced include energy related costs and perhaps even travel. Many people are spending too much on these areas of expenditure specifically. Take for example energy costs, one comparison based website USwitch details how as much as £618.00 each year could be saved! Another way you could reduce your monthly costs is by considering a car share scheme. It may be that fuel costs could be reduced by collaborating up with work colleagues and taking turns to drive to work. For those who can’t think of anyone to car share with, why not try the website Lift Share; providing ways of finding people in your area who want to achieve the same thing.   

Once you have made cuts and reductions to all possible areas of your budget it is next important to consider your financial plan going forward. To do this it’s time to set yourself a new budget. Any form of plan you make is effectively a goal and by our very nature we are often more driven to achieve something we wish to do by reviewing an activity as a goal. So instead of seeing your budget as a need to have (which fundamentally it is) view it as a goal to achieve. Managing your money effectively can be incredibly rewarding and quite literally when doing so means you have more of it spare. For those of you not sure where to start, why not have a little look online and options which are available as support. One such example is the Money Advice Service who offer a free budget planner. Making room for a savings plan within your budget will never be a decision you live to regret. Savings not only allow you to plan for a future venture but also provide a resource should an unexpected cost present itself. For more information on the benefits of having a savings reserve please follow this link to Pocket Smart

Warning: Late repayment can cause you serious money problems - For help, go to

This article is not intended to contain information about, or advertise, products offered by us but is intended to contain information, give opinions or discuss generally available products/services.

Author: Internal Customer Services Agent