With research revealing that money worries can increase the risk of serious health problems by up to 30%, it’s clear that getting your finances in order can carry huge benefits.1
More than 60% of us confess to giving up resolutions by mid-January. However, by setting goals to make changes each month, you can remove some of the stress, improve your finances and find yourself in a much better position.2
To help you get started, Virgin Money’s money-saving expert, Alina Jaffer, has teamed up with personal finance expert and journalist, Faith Archer, to share six tips to implement monthly for your New Year money makeover.
Alina says: “The start of the new year is the perfect time to reassess your financial position and begin budgeting and planning for the year ahead.
“We hope that these expert tips will help people to achieve the ultimate money makeover for 2022 and start the year with a positive attitude to your finances.”
1. January- Build a budget
January can be a challenging month for finances, largely due to paying off credit card bills from Christmas shopping, but this also means that it’s a great time to tighten the purse strings and prepare for the year ahead.
Faith says: “You can get off to a great start in 2022 by planning your budget for the rest of the year. You should start by checking your bank statements to see where your money goes. Then build a budget to allow you to free up money to pay off debt, while also setting money aside for savings.
“A handy tip is to make sure you’re keeping track of how much you spend on different things during the month, so you can set individual budgets for each and keep track of how you’re doing.”
Alina adds: “Make the most of the clever tools available with your personal current account to help you budget, most are available on the go and they will help you to identify where you might be overspending and then you can set budgets and check your progress.”
2. February- Learn to love saving
The start of the year is also a great time to plan ahead and save for upcoming goals, like a holiday, buying a new house, or simply saving for a rainy day.
Faith comments: “Once you’ve planned your budget, work out how much you can realistically put aside each month, and then set up a monthly direct debit to your savings so you’re not tempted to spend everything left in your bank account.
“Whether it’s saving just a pound a day, or £100 a month, putting money aside regularly will help you afford to splash out on a special occasion in future.”
3. March- Cash in your clutter
Most people’s homes contain numerous potential money-making opportunities, and taking advantage of this is as simple as checking through your belongings for things you no longer use but that hold value.
Faith adds: “Everything from clothes to computer games can be sold online and turned into cash. What’s more, with a huge range of websites for selling used items, like Ebay and Music Magpie, Depop for clothing, Gumtree and Facebook Marketplace for larger products, there are plenty of opportunities to take advantage of.”
4. April- Spring clean your bills
Checking through your energy bills and direct debits can be a great way to cut costs and save throughout the year. With energy costs rising exponentially, it's no surprise that searches for switching energy suppliers have reached a volume of 18,700 a month.3
While rising energy bills are of concern, you should also consider installing a smart meter, or cancelling that forgotten gym membership. Taking a step back to analyse your bills and outgoings is an important consideration when saving.
Faith adds: “Scan through all of your regular payments and think, ‘can I ditch or switch?’ Do you need subscriptions to multiple streaming services? Do you use that gym membership enough? If the answer is no, consider ditching them to save some money each month.
“For bills you can’t cancel, like utilities, car insurance or your phone bill, have a look to see if you’re paying more than you need to. If you can find a better deal elsewhere, it’s worth switching providers to save cash.”
5. May- May the debt not be with you
Taking time to assess and clear your debts is key to resolving your financial worries for the year ahead, and with a bit of planning it can be quite easy to do.
Faith says: “Make a list of what you owe and where, jotting down the balance, minimum payments and interest rates.
“From here you can decide how to proceed. Do you want to tackle the debt with the highest interest rate first, to save yourself the most money? Or would you rather start with the smallest balance first, for the motivation from clearing a debt? Make sure to keep up the minimum payments on all your other debts, while putting any extra money towards clearing one in particular.”
6. June- Save on spending abroad
Many of us are eager to head abroad in 2022 after so many travel plans have been cancelled. However, after saving up for your holiday, the last thing you want to do is overspend unnecessarily once you are there.
Faith says: “If you’re heading overseas on holiday, finding a great deal on flights and accommodation is important but it is also worth thinking about how you can save money while you actually spend.
“This means ensuring that you aren’t going to incur additional charges for withdrawing cash abroad by choosing the right current account provider. It’s always good to take some foreign currency in cash too, but make sure you exchange money in advance, rather than paying over the odds at the airport.”
Alina adds: “Cut the cost of spending abroad by choosing your current account wisely. Look for an account with zero fees for debit card payments and cash withdrawals. Some providers might even offer travel insurance as part of the deal when you open up an account too.”
For a month by month guide to your finances in 2022, visit: https://uk.virginmoney.com/brighter-money/give-your-money-a-makeover-in-2022/ Link opens in a new window