A new year means new beginnings, which is why January is a time to take stock and make positive changes.
It’s also a perfect opportunity to improve your financial wellbeing, and that starts with saving. In 2020, many of us experienced financial upheaval and had to rely on savings to pay bills. In contrast, if your job was unaffected, you may have ended up with more money in the bank, from suspended gym memberships, cancelled holidays and not spending on commuting and office lunches.
Wherever you are on the savings spectrum, putting something away every month is a fantastic way to start 2021.
Here are five savings resolutions for the new year.
Go for goal
A savings goal will help focus your mind and reinforce healthy financial habits. Whether it’s £50 for new trainers, £500 for a laptop or £5,000 for a car, seeing your balance build towards a target makes it easier to maintain a savings plan.
Choose the right account
Make sure your savings account has the right features for you. For example, if you may need instant access to your money, choose an account that doesn’t have penalties for withdrawing money early.
If you’re happy to put your money away for longer, then a fixed term bond may offer higher returns.
And consider an Individual Savings Account - interest payments on a cash ISA are tax-free, and you can put away up to £20,000 in the 2020 -2021 tax year.
Some savings accounts let you separate your money into different “pots” for different savings goals.
For example, you may have a holidays pot, a Christmas pot and an emergency pot. This makes it easier to keep track of individual balances and see where you may be falling short with your savings.
Choose your pots at the start of the year and review them every month.
Pick a day to go spend-free
Make one day a week a no spending day and put the money you save into a dedicated account or pot.
It’s easy to start the year with good intentions and ambitious targets. However, if you’re not realistic and try and do too much too soon, you’ll quickly find it hard to stick to your new plan.
So set a manageable target to start with - you can always increase it later on.