How to improve your finances in the New Year

January is just around the corner, which means millions of New Year's Resolutions will be decided - many of which will be broken quickly. If you are considering potential resolutions, why not review your outgoings to boost your finances?

Perhaps the best thing about doing this is that it only needs to be done once a year, but will have long-lasting effects, boosting your bank balance without you having a pay rise.

Here are our top tips for giving yourself a little extra:

1 PensionLook at your expenses

A crucial element of getting finances in order is controlling how much is spent in relation to what is earned. Knowing exactly how much you need to spend also keeps you aware of the rest of your spending, which can help you avoid overspending.

2 PensionReview your credit cards

If you are paying high interest on credit cards then you could be paying significantly more than the cost of your borrowings. It will also take longer to clear the balance, especially if you only make minimum payments. But there are a significant number of 0% interest credit cards, so you could try to transfer your balance onto the new card and eliminate the interest charges, hopefully clearing the debt much quicker. Always check how long the interest-free period is though, as they can vary from a few months to almost three years and then the interest can be high. If you are unable to clear the balance before the interest rate takes effect, try and do another balance transfer to a different interest-free card.

3 PensionCompare energy prices

If you've been with the same provider for a while without exploring the rest of the market it could be worth getting some quotes. Companies like uSwitch give quotes based on your actual usage, making it easy to see which company is offering the cheapest deal. It's possible to save a couple of hundred pounds a year just by switching energy providers, and if you can get a smart meter you can have greater control over your usage by seeing what is racking up the costs.

4 PensionTry a new bank

There aren't many companies that pay you just for being a customer, but some banks do exactly that. The offers vary, with some paying a sum each month if you pay a certain amount into it, while others pay you a single lump sum for switching away from your existing bank. There are also accounts offering generous cashback on direct debits and spending. If you are interested in finding out if any are appropriate for you, MoneySavingExpert has details on specific accounts.

5 PensionMove your savings

With the Bank of England base rate still sitting at 0.5%, the interest rates for many savings accounts have remained low. If you want the reassurance of cash but do not need immediate access to your savings, consider locking it away for a set period of time as you can often get higher interest rates. A fixed ISA can pay out over 2% a year, compared to standard savings accounts usually being below 1%.

6 PensionStop paying unused direct debits

Direct debits can be extremely useful, but the danger with them is it's easy to forget what you have signed up to - especially if you rarely look at your account. You may be surprised to see you still have an expensive gym membership or that your mobile contract is higher than you remembered; reviewing your direct debits will let you see what needs to be cancelled and if you need to call some providers to try and haggle a reduced cost.

7 PensionDon't overpay a mobile contract

At the end of a contract period, many networks will automatically put the account holder onto a rolling contract. It's worth talking to your provider to find out if you are on one, as it may then be possible to switch to a lower tariff. Similarly, if you have an expensive monthly cost but do not use all of your allowances, you may want to consider a plan with fewer minutes and data, as they are invariably cheaper.

8 PensionCheck your insurance costs

Many people have a number of insurance plans, including health, pet and contents insurance. Comparison sites make it quick and easy to scan the market for the cheapest options, and a quick chat with your existing provider could lead to a lower charge.

9 PensionReduce train fares

If you commute on the train you may find that your travel costs are your biggest expense, but there are ways to reduce the costs for many journeys. Trying to book around 12 weeks before the journey can be cheaper, as that is when the timetables are set and tickets are usually released soon after. One of the big ways of reducing train costs is by splitting the tickets. This allows you to do the exact same journey, but instead of buying a ticket from your departure place to your destination, if you buy separate tickets that go to a specific stop on that journey, then from that stop to another, you can make huge savings on the total cost. MoneySavingExpert gives an example of saving £219 on a journey from London to Durham, and has a guide on how to split tickets.

These are just some of the ways that you can save money without cutting back on luxuries, but there are many other ways too, as well as looking at ways to raise extra cash by selling unused items that are gathering dust in your home.

What methods do you use to make the most of your earnings? Let us know with a comment below.

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The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new

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