In 2009, the Daily Telegraph reported that sixty per cent of people who were planning to make New Year’s Resolutions intended making a resolution relating to their finances. The spring is a great time for you to organise your finances and so here are ten easy New Year’s Resolutions that you should be making.
1. Switch your current accounts
A survey by leading bank Santander in 2010 found that the average time that Brits held their current accounts was longer than the average relationship.The study found that Brits hold their current account for 16.5 years, compared to the average relationship which lasts 14.1 years. Bank accounts have come a long way in the last few years so shop around and find a current account which offers you a good rate of credit interest, great customer service and additional benefits such as travel insurance or discounts on other financial products.
2. Open an ISA
Individual Savings Accounts allow you to save an annual sum without paying any tax on your interest. Most cash ISAs allow you access to your funds and they are a great way of building up your savings and earning a tax-free rate of interest.
3. Find 0% balance transfer credit card
Recent research from ING Direct found that, in 2009, the average person ended up £380 in debt simply covering the cost of Christmas. So, if you are carrying a credit card balance into the New Year, shop around to find a card which offers you a 0% rate of interest for several months on any balance you transfer to the card. You could save yourself hundreds of pounds in interest.
4. Start a regular saver
Regular savings accounts typically run for a twelve month period and you can save anywhere between £25 and £500 per month. These accounts tend to pay a high bonus rate of interest if you contribute a regular amount every month and don’t make any withdrawals.
5. Submit your tax return
If you are one of the millions of people who complete their own self-assessment tax return, remember that the deadline for online tax return submissions is 31st January. So, if you haven’t already sent a paper based tax return (for the 31st October deadline), make sure you submit your online return by the end of January. If you don’t, you could face significant financial penalties.
6. Cancel unnecessary direct debits
When was the last time that you reviewed your Direct Debit payments? Make a list of all your regular outgoings and cancel any direct debits that you can do without.
7. Start paying something off your mortgage
Millions of UK borrowers have ‘interest only’ mortgages. By 2007, a third of all UK loans were being arranged on an ‘interest only’ basis. So, isn’t it time that you started actually paying something off your home loan? You can do this by converting part or all of your mortgage to a ‘capital and interest’ (repayment) basis or by paying off smaller ad-hoc lump sums.
8. Make sure you have enough life insurance
According to a recent report from the leading insurer Scottish Provident, 58% of Britons do not have any type of protection in place. Just 35% of the nation has life insurance whilst a mere 13% have critical illness cover and 9% have income protection. Life insurance can be much less expensive than many people think and it is vital that your family and your dependents are protected in the event that the worst should happen.
9. Check what interest you are receiving on your savings
Many savings accounts offer an excellent ‘introductory’ rate of interest in order to encourage new investors. However, when this initial bonus interest rate ends, you can often be left receiving a tiny rate on your savings. So, check what interest rate you are receiving on all of your savings accounts and move your money to a better account if you can.
10. Make a will
If you haven’t done so already, you should ensure that you have a will. Not only does a will determine exactly how you wish your assets to be shared out on your death but it also ensures the right people are provided for (for example, if you are unmarried your partner may not automatically inherit your assets). A will also ensures that you do not pay any more Inheritance Tax than is necessary.