5 tips to take back control of your finances this year

Paul Wilson, Personal Finance Expert for Little-Loans.com, shares five ways you can take back control of your finances this year

Even if you haven’t made any resolutions, the new year is still a good time to take a look at areas of your life you might want to improve upon. Your finances can be a great place to start, because freeing up some money could give you the opportunity to do other things, like building up a savings pot or emergency fund, making home improvements or booking a holiday. Here are five tips to tidy up your finances in 2022.

Budgeting

If you want to get a grip on your spending, the best place to start is with a budget. This could be a simple spreadsheet with your incomings and outgoings, or you could use a budgeting app to help. Apps like Snoop, Money Dashboard, Emma and Monzo can help you keep track of what you spend and show you where you may be wasting money. Most of them let you link all of your accounts and will categorise your spending so you can see where you could make cutbacks. There’s plenty of apps to choose from so research the market and find the best one for your circumstances.

Subscriptions & memberships

Perhaps one of the biggest money wasters is unused subscriptions or memberships. Write a complete list of every subscription you have and how much it costs. Then decide if it’s worth keeping. If you’re paying for a Netflix plan that lets you watch on four devices but you only ever use the TV in the lounge, then downgrade. Similarly, if you’re signed up to several streaming sites, ditch at least one. With music streaming, check if you could save by having a family plan rather than individual accounts. Do you really need Amazon prime, or could you wait a couple of extra days to get free standard delivery anyway? Be thorough and honest. If you’ve only been to the gym a handful of times in three months then is it worth paying for?

Direct debits & bills

Do a complete audit of all your direct debits and standing orders. Are you getting the best deals or could you be paying less? Set reminders for when all of your utilities or insurance products are due for renewal and make sure you shop around as soon as the time comes. Your TV package could be reduced if you decide to cancel some of the channels you barely watch, and some mobile phone providers will reduce bills when your contract reaches a certain length of time. Use an evening to analyse all of your direct debits, set renewal reminders and call any companies to ask if they can help you reduce your bills.  

Consider consolidating

If you have several credit cards, loans or car finance deals, you might be able to consolidate them into one easier payment. Work out what you owe and see if it would be cheaper to get one loan to cover it all. When paying off credit cards make sure you are still taking advantage of any introductory offers. If you are paying interest then look to see if you can switch to a card with a 0% balance transfer rate. There is no one size fits all when it comes to paying off debt, but check what you owe and whether there is a way to reduce it right away.

Start saving 

Saving doesn’t have to be complicated. Open a straightforward savings account and start putting a small amount of money away every month. Do it as soon as you get paid so it’s less noticeable. It could be the cost of a takeaway each month, so if you save £30, by the end of the year you’ll have £360 to put towards Christmas or to carry over and keep adding to. Start with an amount that you won’t miss to ease you into it. Even £10 could help you get into the habit and give you something to work towards.

Cash Out

Having actual money in your hand can make you more mindful of what you spend. Many people adopt an envelope or jar method, where they attribute money each month to things like ‘food’, ‘eating out’ etc. Seeing the cash you have left can be an incentive to stay on budget. Being mindful of your money is one of the first steps to seizing control of it and getting on top of your spending in 2022.