9 New Year Money Resolutions for 2022
Setting yourself some new year financial resolutions is a great way to take control of your finances and make your money work harder for you. Saving, shopping around and setting a budget are just some of our tips for helping you towards a money-savvy 2022.
The new year is the ideal time to take stock of your finances and set yourself some money goals. From saving more and budgeting through to checking your mortgage and credit score, here are 9 new year money resolutions for 2022.
Clear your credit card debt
Paying off what you owe on credit cards should be a priority any time of the year, but when January comes your festive spending will be on your statements too. At the very least you should always make the minimum payment on your credit card bill, but if you’re serious about clearing your debt quickly you’ll need to pay more.
Ideally you’d pay off your entire credit card balance at the end of each month and avoid interest charges altogether. But if this isn’t realistic, and you’re paying a high interest rate on your card, you could consider switching to a 0% balance transfer card to give yourself time to clear what you owe without accumulating any more interest.
» COMPARE: 0% balance transfer cards
Start saving more
It’s a staple of any list of new year financial tips, but if you’re in a position to do so, it’s usually a good idea to save. Making sure you have an adequate emergency fund should be the first priority to cover expenses that come out of the blue. You’ll need the option to get your hands on this fast, so an easy access or high interest current account could be a good home for these rainy day funds.
To ease the temptation of dipping into your emergency funds for things you shouldn’t, make sure you have a separate account for the money you save in general. This might be an easy access account, fixed rate bond or a cash ISA, but at a time when interest rates are relatively low, you should always compare accounts and find the best savings rates.
» MORE: Getting into the savings habit
Improve your credit score
If your credit score leaves a little to be desired, you could take steps to improve it in 2022. A good credit score can be crucial in being able to access the best loans, mortgages and credit cards, so making sure it is up to scratch is likely to save you money in the long term.
Check your mortgage
The days of record low mortgage rates might be in the past, but borrowing costs on home loans will still be cheap enough to save some homeowners some decent money if they remortgage to a new low-rate deal.
If you haven’t remortgaged in the last couple of years, dig out your mortgage paperwork and compare the rate you’re paying with the best rates available now. It’s not quite as simple as switching if there’s a lower rate available – early repayment charges and costs of a new mortgage need to be considered too. But do the sums and you might find remortgaging will lower your monthly repayments and save you plenty in interest over the lifetime of your mortgage as well.
» COMPARE: Remortgage deals
Work out a budget
If you haven’t already got one, create a personal budget. Tracking how much money you have coming into your household and where you are keeping it is vital if you want to take control of your finances.
You might want to write everything down on a piece of paper, set up a simple spreadsheet or download a budgeting app to your phone. But once you can actually see your income and expenditure side-by-side, it’s far easier to identify where you might be overspending. It will also help with working out how much you would normally have left over each month to perhaps put into savings or a pension, or overpay on your mortgage.
» MORE: Learn the budgeting basics
Save for your retirement
The passing of another year means you’re also one year closer to retirement. If you’re of an age where the time left until you retire is less than the time you’ve already spent at work, hopefully you’ll have a pension in place and are on track to achieve your retirement goals – if you’re not, you could think about boosting your pension.
When you’re much younger, it can be hard to rouse yourself to plan so far ahead, but it’s vital to start saving into a pension as soon as you can. If you have a workplace pension with your employer, or your own private pension that you pay into, try to increase your contributions if you can. And if you have no pension at all, you could consider starting one now to give yourself a better chance of enjoying a comfortable retirement.
» COMPARE: Personal pension providers
Keep a lid on your energy bills
A perfect storm of rising gas and electricity wholesale prices, energy providers going bust, and the energy price cap rising to a record high means the cost of running and heating a home became considerably more expensive for most of us in 2021.
Switching tariffs to a better deal can be a good way to save money, but such is the current malaise in the energy market, there is a shortage of available and attractive deals right now. Be sure to run comparisons every couple of weeks, but until more competitive deals start to return, you might find that staying with your current provider could be your best option.
In the meantime, our tips for saving energy at home offer practical ways to try and trim your gas and electricity bills.
When you’re buying something, taking the time to shop around has the potential to deliver big savings. Whether you need new shoes or a sofa, don’t simply settle on the first option you see, look around to check if it’s cheaper elsewhere.
The same most definitely applies when it’s time to renew things such as your home insurance or car insurance as well.
» COMPARE: Car insurance
Investing provides the opportunity for you to enjoy a higher return on your money than if it’s held in a savings account, particularly if you invest over the long term.
However, the key word here is “opportunity”, as there can be no guarantees that the value of any investment will rise – indeed, you need to be aware that the value of investments can fall, and you could lose money if things don’t go right.
If you’re comfortable with this risk, and how investing works, a stocks and shares ISA might be an option to explore first. If you’re not sure if investing is right for you, it’s a good idea to talk to a financial adviser about your options before you dive in.
» MORE: Beginners’ guide to investing
WARNING: We cannot tell you if any form of investing is right for you. Depending on your choice of investment your capital can be at risk and you may get back less than originally paid in.
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Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more