When you think of new year’s resolutions or plans for the coming months, the first things that pop into most people’s heads usually include getting fit, drinking less alcohol or taking up a new hobby. But what about financial planning?
Whether you’re determined to pay off your debts or serious about saving, making financial plans is a great idea. And with 2023 likely to be another financially challenging year, sticking to them could be the key to ensuring the next 12 months are prosperous.
Of course, making plans and sticking to them are two very different things but if you’re committed to achieving yours, here are a few we think would benefit everyone.
Thanks to credit cards and easy payment options, debt is easy to get into but much harder to get out of, especially when you take into account the regular interest payments that come with it.
If you can, use any surplus cash to pay off your debts asap, prioritising any that could jeopardise your accommodation or heating, or land you in legal trouble if you fail to keep up repayments, then moving onto the most expensive and working your way down to the least costly.
This is something we could also help you with via our debt consolidation loans.
Although it’s widely recommended that everyone should have between three to six months worth of earnings set aside in case of an emergency, for many people this is simply impossible.
However, there’s no denying that regularly saving as much as you can afford – even if it’s only a few pounds per week – is a great idea, so make sure you have an active savings account. Although the interest rates they’ve been paying out in recent years has been minimal, rates are on the up in 2023, making them an important asset again.
The best way to start saving is to work out what you’re spending money on, identify what you can do without and save that money instead. Take a look at what subscriptions you have, whether it’s Netflix, Amazon or ‘bolt-ons’ related to your mobile phone and if you can live without them, cancel them and start saving what you would have spent.
Making a budget is one of the simplest and most effective ways of keeping tabs on your finances, so sit down with your bank statements and work out how much you need to spend on essentials (your rent/mortgage, utility bills and groceries), how much you can afford to spend on hobbies/treats and how much you should therefore be able to save each month.
By ensuring you always know how much money you have coming in and going out, you can identify potentially expensive periods ahead of time and take proactive steps to ensure you have sufficient funds set aside to cover the cost without getting into more debt.
If you don’t already make regular budgets, now is the time to start. Lots of budget planners are available for free online to help you get started (this one from Money Saving Expert is great) and our Money and Budgeting Service (MABS) is available to help tenants of Housing Leeds create realistic budgets and ensure their bills are paid on time.
Although the cost of energy is currently high regardless of supplier, it’s worth shopping around for cheaper deals on your energy bills and, if you can find any, save the difference.
Similarly, shopping around for cheaper groceries, broadband and mobile phone providers and fuel prices are also easy wins.
At Leeds Credit Union, we provide straightforward and affordable loans and savings accounts to our members, helping them take back control of their money and achieve financial security.
If you’re interested in becoming our newest member, click here.