These are some of the most commonly-made new year’s resolutions – but maybe you should consider making some financial resolutions to help you to prosper in the new year. You may even find these easier to stick to than your normal resolutions!
How can you give your finances a boost in 2014? Try following our five suggestions below:
Make Sure Your Bank Account Is The Best One For You
This may sound simple but most people do not have the optimum bank account for their circumstances. The starting point is to analyse your finances – are you someone who always has money left in their current account when pay day arrives? Or are you someone who is generally in debt by the time the next pay day comes around?
For those of you with savings left at the end of each month, you should move to an account which pays decent interest on credit balances. If you are always in credit (after paying off any credit cards or other monthly payments) then you would be better off transferring the balance into a higher interest savings account. Even if it’s only a small amount each month, it soon adds up with compound interest.
If you tend to be in the red by the end of each month then you should move to an account that penalises you the least for this. Look for the lowest interest rate on overdrafts and the account with the fewest monthly charges if you go overdrawn. This could save you a huge amount of money each year by the time you add up all of the applicable interest and charges.
Something as simple as changing your bank account could make (or save) you a considerable amount of money over the course of a year.
Re-Mortgage Your Property
If you have been paying a mortgage for a few years then you may not be on the best deal. This is particularly true for those of you who had been paying a discounted or fixed rate which is now finished.
Shop around and see what deals are about. A small drop in the interest you are paying can save you a lot of money over the years.
When you are doing your sums, make sure you take into account any legal or arrangement fees, as you need to work out the total cost of a new mortgage to compare it to your current deal.
Optimize Your Portfolio
If you have investments, the new year is a good time to sit down and take stock (no pun intended). Remember, even if you don’t have private investments, you should also take a look at your pension provisions.
Even with a company pension, you will normally have a say in how your pension pot is invested. Not all of us will have the benefit of specialised risk management software such as that provided by Sungard APT but there are some simple steps that every investor can take.
A good starting point is the general rule of thumb that you should subtract your age from 100 and this is the amount you should invest in stocks. The rest should be invested in lower risk assets such as bonds. However, with increased life expectancies and pension payout ages being increased, it’s a good idea to subtract your age from 110 instead.
Start off by analysing your current asset investments and see if they are performing as expected. You will need to work out how much risk attaches to each asset in your portfolio. Accurately calculating risk is a difficult task and even the professionals use complex algorithms to assess the risk attaching to their portfolios. You may need to change some of your asset investments so that they match your risk appetite. The most important rule is to diversify your portfolio, which means diversifying the risk attaching to your assets.
Fix Your Utility Bills
The most important thing is to shop around and there are lots of great comparison sites online which will help you find the best deal. Check everything from your household utility bills to your cell phone contract – you are sure to be able to save money. With many providers you will also be able to fix the price so you won’t get any nasty surprises during the term of your contract.
It might take a bit of time to sit down and go through your various contracts, but it will be worth it when you save enough money to treat yourself once a month, or afford that holiday you’d like to take.
Get The Best Rates For your Credit Cards
Credit card companies always tempt you with great introductory offers which then run out after a few months. This is because they know that most people won’t bother changing their card even once the introductory offers have expired.
Well why not beat them at their own game and chase the best rates? Keep an eye out for the best deals and change cards each time you find a better offer. You will be able to take advantage of interest-free periods and 0% balance transfers. Over a year this could save you a considerable amount of money.
What financial new year’s resolutions will you make for 2014?