One of the most common New Year’s resolutions is to get out of debt and back into a financially secure position. It’s no surprise; overspending during the festive period and general monetary pressures in a difficult economic crisis means that a rising number of people are in debt. In fact, a Credit Action report has shown that average household debts can add up to approximately £53,800 – a sum that more families are finding difficult to repay. However, becoming financially independent is a goal that many are striving for and ‘spend less, save more’ resolutions are topping New Year to-do lists across the country. Getting back into financial shape can be difficult, but there are some simple ways of managing your finances that can have a big impact on your bank balance.
Consider keeping your banking simple.
The financial industry can be a confusing maze of overdrafts, loans and interest rates so opening a basic bank account can be a good way of keeping your money in check. These no-frills accounts are easy to manage, with no overdraft facility and pre-paid cards that better allow you to budget. They can help prevent overspending as money can be loaded onto the prepaid card with the safety of knowing that essential bill money remains in the bank. Avoiding high interest rates that come with credit cards and unpaid overdrafts, basic bank accounts can help you get out of debt that can sometimes spiral out of control.
It is also a good idea to properly analyse your spending and adjust your lifestyle accordingly. It may seem obvious, but in order to get back into the black you must only spend what you can afford. There are some things like satellite TV, holidays, luxury foodstuffs or new clothes that are not absolutely essential, so consider cutting these out to save money.
Moreover, creating a strict budget and sticking to it is a sure-fire way of getting your finances back in order. Shopping on a budget can be rewarding and Britain has a number of good quality shops that cater to people with lower funds. Furthermore, most supermarkets also do value food ranges that are a fraction of the price of brand-name products but taste just as good. Think about switching to these cheaper brands and see how much you can save. In addition, think about going for second hand goods. Although they’ve picked up a bad name, charity shops or car boot sales are treasure troves for bargain hunters – you can often find anything from DVDs to clothes to interior decorations.
These are just a few simple ways that you can get financially fit in the new year but by following them, you can make huge savings. Being financially independent is a hard road but the rewards are fantastic, so think about managing your finances the smart way.
