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It’s that time of year again when we all make resolutions and swear to keep them. After the excesses of Christmas and the New Year celebrations, most of these are to do with health and looks – quitting smoking, losing weight and so on. But why not make a few financial resolutions for a change? They could make all the difference to your future. Here’s a few to get you started:
- Resolve to become debt-free. If you’ve been using the plastic to buy Christmas presents, leave it at home when you go to the sales. Better still, don’t go to the sales. If the situation is more serious and you have been racking up substantial debts for years, get help now. Don’t go to those companies who advertise on daytime TV and offer to consolidate all your debt – you could end up losing your home. Instead, contact your local Citizens Advice Bureau or the Consumer Credit Counselling Service on 0800 1381111 or the National Debtline on 0808 8084000. They can help negotiate with creditors to pay off debt.
- Resolve to get a pension. The pensions ‘crisis’ isn’t going to go away. You need to provide for your own future – unless, of course, you’re going to be happy living on the basic state pension, which is currently £82.05 a week. Check out what your employer offers – it’s possible they’ll make a contribution to a pension for you. Any payments you make will attract tax relief at your marginal rate of tax, so higher rate taxpayers need pay only £60 to have £100 added to their pension fund. If you are self-employed or your employer does not offer a contribution, consult an independent financial adviser.
- Resolve to save. Everybody needs to get in the habit of putting money away for a rainy day. Try to build up an emergency fund of between 3 and 6 times your monthly net salary. A cash mini-ISA is a good place to save the money, as the interest is not taxable and rates tend to be good. The maximum you can save in a cash ISA is £3,000 per year. Remember, however, that you can’t have a mini ISA if you already have a maxi ISA – check with your financial adviser.
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