Tim Leonard
Adam French
Now is the ideal time to review your finances and set some money goals. From making sure you’re getting the best savings rates through to checking your mortgage and credit score, here are seven financial goals for 2024.
Check your mortgage
With mortgage rates peaking at levels not seen since the financial crisis of 2008, securing a good mortgage deal was challenging last year. Many borrowers who either have a tracker mortgage or who have remortgaged to a new fixed-rate mortgage in the past 12 months are likely to have seen their monthly repayments rise notably as a result.
Mortgage rates started to fall back in the second half of the year, but if you have a deal that is due to end in 2024, it’s vital that you shop around. A new mortgage deal can often be arranged around six months before your current one ends.
“Consumers who are approaching the end of their fixed-rate mortgages are facing the prospect of higher borrowing costs,” says Varun Khanna, head of consumer experience at credit reference agency Equifax UK, in an email to NerdWallet. “It is therefore crucial for these consumers to start preparing well in advance of their remortgage.”
» MORE: Check the current mortgage rates
Improve your credit score
Having a good credit score is vital if you want the chance to access the best personal loans, mortgages and credit cards, so making sure it is up to scratch could save you money in the long term.
“Responsible borrowing, such as taking out loans within your means and repaying them promptly, reflects positively on your credit report,” explains Khanna. “However, chronic late or missed payments or using your credit card’s cash advance facility, constitute bad debt, negatively impacting on your credit score and hampering your ability to secure future credit.”
Khanna says registering and updating your details on the electoral roll is a good first step to boosting your credit score. “Additionally, reviewing your financial ties, such as joint accounts or credit cards, can help you avoid any unforeseen issues when applying for credit.”
» MORE: How to improve your credit score
Make the most of higher savings rates
The rates on the best accounts hit highs not seen since 2008 last year, so there is no excuse for letting your money languish in accounts that are paying next to nothing.
Whether you need an easy access account so you can access your funds whenever you want, or a fixed-rate bond where you should get a higher interest rate for locking your funds away, you should shop around for the best savings rates.
“Between the Bank of England holding interest rates, banks starting to cut savings rates and mortgage rates dropping, it looks increasingly likely that we’ve already hit peak interest rates,” says Laura Suter, head of personal finance at investment platform AJ Bell, in an email. “Peak rates mean that it’s time for savers to get moving if they haven’t yet locked in a fixed-rate deal. We’ve already seen rates on some deals drop, which should spur savers into action.”
» MORE: How savings accounts earn you interest
Clear your credit card debt
Paying off what you owe on credit cards should be a priority any time of the year, but in January you may have your Christmas spending to settle too.
In an ideal world, you’d pay off your entire credit card balance at the end of each month and avoid interest charges altogether. If this isn’t realistic, always make at least the minimum payment so you’re not hit with late fees. Though if you’re serious about paying off your credit card debt quickly, and want to save interest, you’ll need to pay above the minimum amount.
“If you do find yourself falling behind, taking stock of what repayments you have, and which need to be prioritised, is essential,” says Khanna. “Rent, mortgage, utilities, and council tax are at the top of the list, and if you have outstanding loans or several different credit cards, it’s usually best to focus on paying off the one with the highest APR first.”
Use your ISA allowance
Now savings rates are much higher, investment platform AJ Bell estimates an extra one million savers will need to pay tax on their cash interest in the current tax year.
Thankfully, you can put up to £20,000 in a cash ISA each tax year and know that whatever interest you earn can’t be touched by the taxman going forward.
“Cash ISAs are an obvious port of call for those seeking to shelter their savings from tax,” says Suter. “The downside of this approach has always been that you usually have to accept a slightly lower interest rate than on a non-ISA savings account, but for many the implications of not sheltering your interest from tax probably now far outweigh the haircut you take on the headline return.”
» MORE: Do you need an ISA or a savings account?
Build an emergency fund
Building up an emergency fund should be among your top priorities this year. The idea is that you can easily dip into this money should something unexpected happen, such as your boiler giving up the ghost or finding yourself out of work.
“Usually we say this pot should be around three to six months of expenses (just the essentials), but how much exactly depends on your own comfort level,” says Suter. “The money should also be in an easy access cash account, so you can get your hands on it when you need it. If building up that sum of money feels daunting, then just start small and work up from there. Even putting away £25 or £50 a month can add up and provide a cushion against some unexpected expenses.”
Seek help if you need it
The cost of living crisis has left many of us feeling poorer. For some, it may mean creeping financial worries that you haven’t experienced before. Higher mortgage rates will pose a problem for many in 2024, but there are ways your lender can try to make life a little easier.
“Your mortgage company has an obligation to offer help – which can mean anything from a payment holiday to stretching your mortgage over a longer period to make the monthly payments more affordable, or temporarily switching to an interest-only deal. So if you feel there’s nowhere to turn, it’s worth getting in touch and asking for help,” said Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown, in a press release responding to figures showing a rise in mortgage arrears.
Importantly, the same advice to seek help applies if you’re facing any kind of money worry. Talk to your family, friends, the lender or company you owe money to, or a debt charity, but don’t rely on the problem going away on its own.
» MORE: How to get debt help
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