The first month of the new year has nearly come and gone and if you’re struggling to keep up with the money resolutions you made just a few weeks ago, one of the UK’s top credit card providers has shared some tips to get you back on track.
With household budgets set to feel the squeeze in 2022 as a result of rising inflation, soaring energy costs and the increase in National Insurance Contributions, setting a goal now and following these five tips from Vanquis could improve your finances.
Thomas Allder, customer director at Vanquis, suggests simple ways to realistically stick to the most popular money resolutions.
1. Improve my credit score
In a resolutions poll by Vanquis, 55% of people said they wanted to improve their credit score in 2022.
Thomas advises: “Keeping a close eye on your score will help you keep track of your financial activity and clearly see the factors that affect it, like paying off debt or missing a payment.”
You can check your score for free through some companies, and simple steps such as making sure you’re on the electoral roll can also help.
2. Save more
Thomas suggests setting a comfortable savings target that won’t leave you out of pocket, or with more debt.
He said: “Break it down into a monthly amount, and set up a direct debit to a separate savings account to transfer the amount as soon as you get paid. Of course, you can always increase or decrease the amount throughout the year. Then, crucially, leave that savings pot alone.”
3. Pay off credit cards in full
If you’re paying a lot of interest on your debts, the sooner you pay them off, the sooner you can focus on building up your savings.
In fact, 35% of people said they wanted to pay off their credit cards in full this year.
Thomas said: “Work out if you can make more than the minimum payment each month to clear debts quicker. Small increases will make a big difference in reducing your balance over the course of a few months. Make your payments on time or early each month, to avoid interest charges or fees that might set you back.”
4. Save for a significant life event
Whether you’re saving for a wedding, a property or a new baby, Thomas suggests: “If you can, focus on just one goal at a time. Spend some time writing a list of everything that’s included and research the total or ongoing costs, so there are no nasty surprises down the line.
“Next, determine how much time you have to save for this goal, and therefore how much you need to put away each month.”
5. Spend less on material items
With 22% of people wanting to spend less on non-essential items, it could be a good idea to implement a ’72-hour rule’.
Thomas explains: “This is where you wait three days to buy something you really want.
“Quite often you’ll find the initial impulse has disappeared, and you no longer want or need the item after waiting. Setting a few ‘zero spend’ days across the year also helps you to become more conscious of your regular spending.”
