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 for your wellbeing.
The arrival of the New Year brings with it new goals, and if yours is to manage your money better, achieving this can be easier than you think. More than 60% of us confess to giving up our resolutions by mid-January, but by making small changes each month, you can remove some of the stress, improve your finances and find yourself more in control and working towards your objectives.
To help you get started, Katy Simpson, personal finance expert at Virgin Money Link opens in a new window, has shared six tips to implement monthly for your New Year money makeover.
Katy said: “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 feel more optimistic about their finances in 2023 and enable them to start the year empowered with some new ways to tackle spending and saving.”
1. January - Build a budget
“January can be a challenging month for finances, largely due to the Christmas financial hangover. However, this also means that it’s a great time to tighten the purse strings and prepare for the year ahead.
“Start by evaluating your current spending by checking bank statements for regular outgoings. You can then build a budget which allows you to free up money to pay off any outstanding debt, while also setting money aside for savings where possible.
“January is also a time to spot areas where you might have spent more than you expected. Inflation and the cost-of-living crisis is making money tighter for many, so be mindful of this and be prepared for your 2023 budget to look different to the previous year.
“Make the most of the clever tools available with your personal current account Link opens in a new window to help you budget. Most are available on the go via your mobile banking app, and they will help you to identify where you might be overspending, so you can then 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 weekend away, saving for a house deposit, or simply saving for a rainy day.
“Once you’ve planned your budget, work out how much you can realistically put aside each month. Don’t overstretch yourself – little amounts will all add up over time. Just make sure you set up a monthly direct debit to your savings account, as you’re more likely to spend it if it’s left in your current account.
“Don’t be afraid to experiment with different methods of saving, like the envelope savings challenge, money round-up apps or the no-spend January challenge. Find a method that is realistic and that motivates you, then stick to it. Save little and often and you’ll soon see your savings increase.”
3. March - Cash in your clutter
“Most people’s homes contain potential money-making opportunities. Taking advantage of this is as simple as checking through your belongings for things you no longer use but that hold value.
“Tidy up your home in the New Year and make the most of the unloved items you have lying around the house. Sell clothes and accessories on apps like Vinted or Depop, old tech can be sold on Music Magpie, and you’d be surprised what you can sell on local Facebook Marketplace groups or eBay.”
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.
“Consider whether you really need multiple entertainment streaming services and think about whether you use the gym enough to justify the membership cost. For bills you can’t cancel, like 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.
“While rising energy bills are still a concern, you are unlikely to be able to find a better deal with another energy provider right now. However, you could consider installing a smart meter to help you manage your usage better, and make sure you are taking advantage of the government support Link opens in a new window available.”
5. May - May the debt not be with you
“Taking time to assess and clear your debts is key to resolving your financial issues for the year ahead, and with a bit of planning it can be achievable.
“Although it might feel daunting, make a list of what you owe and where, jotting down the balance, minimum payments and interest rates.
“Tackling your debt head-on is the first step in deciding how to get started. Consider paying off your debt with the highest interest rate first, or if you need to start small, pay off the smallest balance first. Just ensure you keep up the minimum payments on all your debts while putting any extra money towards clearing one.”
6. June - Save on big purchases
“Planning on heading abroad in 2023, getting married or moving house? Life’s big moments can be expensive, but there are several ways to save without having to scrimp.
“If you do need to spread the cost of bigger purchases, you can still do this safely with a credit card or a responsible buy now, pay later card. Although many unregulated BNPL schemes have a bad reputation due to the high-interest rates and missed payment fees, some, like Virgin Money Slyce Link opens in a new window, will not charge you if you miss a payment. So, you can use it to spread the cost of purchases into more manageable chunks, allowing you to spend without compromising.
“It is also worth considering how you can save money while you spend. Look for current accounts that offer cashback or rewards for spending and, if you are travelling, look for a current 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 an account too.”
To learn about how you could use a buy-now-pay-later scheme that puts you in control, head to Virgin Money Slyce Link opens in a new window.