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Most of us can probably agree that it’s not been the best year, financially. The utilities bills are still high, car insurance has skyrocketed despite maximum no-claims, and the cost-of-living crisis shows no sign of abating. It’s hard to know what to do or where to go when there’s just too much month left at the end of the money. Well, firstly, it’s important not to panic and it’s crucial not to bury your head in the sand. We can help, and our support hub can signpost more help – but ignoring money worries and financial problems is the sure way to escalate them.
In the meantime, why not focus on some financial New Year’s resolutions? It’s important to be careful here. Over-ambitious or vague resolutions can lead to perceived failure at an already miserable time of year, so set small, clear goals and recognise every small win.
1. Start Small and Be Realistic
“Look after the pennies and the pounds will take care of themselves” is, sadly, an over-simplified cliché but, like most clichés, there’s truth behind it. After all, every little helps. So, start small. Big, ambitious goals can feel overwhelming and lead to burnout. Start with manageable steps.
Review your finances monthly to understand where the money goes. So many people have direct debits for subscriptions or memberships that they no longer need, so cancel them. Ask yourself if takeaway coffees are such a necessity – or perhaps aim for a once a week treat. Consider changing to a budget supermarket. Just a few pounds a month mounts up.
Use a simple budgeting tool, even just a notebook, or a free app, to track income and expenses. Money Helper has a handy bill prioritiser tool. These slight changes will lead to little wins which will help keep momentum going.
2. Focus on High-Impact Changes
With limited resources, focusing on impactful changes can make a substantial difference.
Consider prioritising any high-interest debt. If appropriate, contact your creditors to negotiate payment plans or seek professional advice from UK charities like StepChange or Citizens Advice. Don’t be afraid to speak to your creditors – they really don’t want you to default so they’re likely to be amenable.
3. Cut Costs Without Sacrificing Essentials
Reducing non-essential spending can free up funds for priorities. There’s an overlap here with number one, but that’s ok because it’s easy and actionable and it will be effective.
Identify and reduce an unnecessary expense each month. Look for those quick wins like cancelling unused subscriptions, switching utility providers, or meal planning to cut grocery costs. Again, there are free apps to help with meal prepping and Instagram is a great source of budget-friendly meal ideas.
4. Start to Build a Rainy Day Fund
This may seem counter-intuitive, after all, savings are surely impossible when you’re struggling? Not necessarily, and even a small cushion can reduce reliance on credit for unexpected expenses.
Aim to save £10–£20 a month for emergencies, starting now. Open a separate, easy-access savings account and set up a small standing order. Some current accounts also have a ‘round up’ facility, whereby any card payments are rounded up and the extra added to a savings account.
5. Make Use of Free Advice and Benefits
Many UK households miss out on help they’re entitled to, so check eligibility for government benefits, grants, or free support. Read our advice on carrying out a Money Overhaul and look into tools like the Turn2us Benefits Calculator. Social media is also a great source of money saving hacks and tips, with pages and groups dedicated to saving money and finding the best deals on, well, everything.
6. Celebrate Small Wins
Yes, we’re talking those little wins again. That’s because it really matters. Acknowledging progress keeps motivation high and makes it easier to continue.
Celebrate every debt repayment or financial milestone achieved, however seemingly insignificant. Give yourself a metaphorical pat on the back and keep a note of how the achievement made you feel. If you can, enjoy a free or low-cost treat.
7. Avoid Unnecessary Pressure
Financial progress takes time, and external comparisons can be demoralising, so focus on your own progress, not others’ situations. Whilst social media can be helpful for money-saving tips and bargain hunting, it’s also too easy to see aspirational lifestyles and apparently affluent friends. Remember, looks can be deceiving and nobody really knows what anyone else is feeling or experiencing. Who knows what debt people rack up on holidays or fancy cars? You do you.
Everyone’s different. Prioritise what matters most to you and your family.
8. Seek Support Without Stigma
Debt and financial struggles can feel isolating, but support is here. Talk to someone you trust or a professional about any financial worries. Don’t be afraid to confide in good friends. Good friends will understand and even help you economise. Don’t isolate yourself socially – that’s a route to loneliness. Invite friends round for ‘bring a dish and a bottle’ nights, watch old movies or get karaoke on YouTube. Social life doesn’t have to rely on expensive venues or taxis home – it’s all about the company. Good friends will get that.
You can find a great deal of confidential, free advice via our Support Hub, whatever your circumstances.
9. Avoid the Credit Trap
Relying on credit will worsen financial stress, so seek out alternatives before borrowing money. Avoid so-called payday lenders and, if you really do need to borrow, check all the interest rates and read the terms and conditions thoroughly.
10. Focus on What You Can Control
External factors, such as inflation, are out of your hands, but you can take steps to manage your finances. Aim to adapt and make small improvements where possible. By taking control where you can, you empower yourself and that leads to yep, you guessed it, more wins.
Keep revisiting and refining your plan as your situation evolves.
Happier New Year
Whilst economising can seem hard, keep sight of your end goal. Imagine how you’ll feel when you’ve reduced your debt and alleviated some of your money worries. Think of addressing your financial situation as you would a diet or fitness plan. Have a clear goal to aim for and set small, achievable and trackable goals along the way. Remember, financial resolutions are about progress, not perfection. Start small, focus on what’s within your reach, and celebrate your successes along the way.
Change is possible, one step at a time. And we are here to help, every step of the way. If you’re struggling, you’re not alone – don’t be afraid to ask for help and advice. That’s what we’re here for, so if you’re struggling with debt (or in financial difficulty), speak to us. We’re here to help you understand all your options.
