New Year's resolutions are notoriously hard to maintain
Thursday 20th January 2022
Katy Baxter
There are countless theories out there about how long it takes to form a habit, but it seems to be between 21 and 66 days. If you are already slipping, maybe it is a good time to double down. If you commit to your New Year's resolution now, by the end of March 2022 you'll be doing it in your sleep. We believe you can help yourself with some simple financial New Year's resolutions.
But where to begin? Warren Buffett famously said, "Do not save what is left after spending, but spend what is left after saving" and whilst these are wise words, if you're anything like me, you need to read it three or four times till the message starts to filter through. Let's start simple: spend less, save more. Do you really need that Costa lemon and poppy seed muffin to go with your daily skinny latte? Saves you £2.25 and 532 calories per day (and you'd even be including a bit of the eating healthier New Year's resolution!).
But seriously, £2.25 per day is £15.75 per week, £68.25 per month or £819.00 per year. Who wouldn't say no to £819 pay out at the end of 2022? Here's another idea - what about your annual council tax "holiday"?
Council tax is payable over 10 months, so we get two "free" months where we don't pay. According to the Ministry of Housing, Communities and Local Government, the average Band D council tax in England for 2021/22 is £1,898, so that means not having to pay £189.80 in council tax for February and March each year. Be honest, do you feel the benefit of this, or does it go by unnoticed? In these two months, you could perhaps double up on the muffin money and give your savings a boost.
So these are two of my ideas to inspire you to spend less, save more. Obviously, it is not an exhaustive list but one that hopefully resonates and gets you thinking up your own savings hacks. But here's the pièce de résistance, the icing on the cake, the jewel in the crown: make your money work harder for you by investing it. Let's stick with our keeping it simple theme, set up a stocks and shares ISA (individual savings account) and pay in your weekly savings. ISAs are easy to manage, they offer flexibility in that you control how much you want to pay in and when, with an overall cap on the maximum that can be paid in one year which is currently £20,000. And the best thing about an ISA is that you don't pay tax on any growth, interest or returns, so there is nothing to report on your tax return. We can help you set up one of these easily.
Remember, in the words of Aristotle, "Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it ensures the possibility of satisfying a new desire when it arises."
The value of your investments can go down as well as up, so you could get back less than you invested