There is nothing quite like the start of a new year to give us all a fresh perspective. If money is on your mind, here are four ways to help get a new perspective for 2023.
1. Revisit Your Household Budget
Start the year by revisiting your budget. Assess your average monthly income against your fixed and variable expenses. Check if you are getting the best deal on any packages and check what subscriptions you are paying for. On average, a UK household spend over £490 a year on subscriptions according to research by Barclaycard Payments. There may be ones you can cancel as you don’t use them. Understanding your financial priorities for 2023 can help you create a budget and save any surplus income for a holiday.
2. Tackle Your Debt
Even if you are already good about managing debt, consider taking steps to help reduce and consolidate it further. The amount you pay on credit is increasing as inflation rises so reducing debt on credit and store cards will have significant long-term financial benefits. Always pay off the balances with the highest interest rates first. Remember, transferring balances to a new 0% Interest rate is not an effective way of reducing debt unless you are paying off the balance. If you do not reduce the balance, it creates more debt and problems further down the road.
3. Plan for your Retirement
Forgetting to plan and prepare for your retirement can be easy, especially when times are tight. The earlier you start; the better off you will be in the future. If you have several pensions, it can be beneficial to speak to a financial adviser about consolidating them. Some older style pension have valuable benefits so it is important to consider what you may be losing if you decide to consolidate your pensions into one pot.
If you do not have a pension then it is worth considering starting one. The earlier you start the better position you will be in once you retire.
If you would prefer not to use a pension and are planning to rely on your investments, ISAs or property instead, it is still important not to leave it too late.
4. Prioritise Your Wellness
The pandemic may no longer be weighing as heavily on your mind as it once did however, this stress and anxiety has likely been replaced with the pressures created by increases in the cost of living.
The New Year can be an opportunity to continue prioritising your personal and financial wellness. Consider taking advantage of any employer wellness resources for physical, mental or financial health or what is available in your community. Having a budget, an emergency fund and a plan can be key factors in improving financial wellness. This can further be enhanced if you get financial advice as it can provide an additional level of reassurance for the decisions you have made.