It’s that strange time in between Christmas and New Year, time to reflect on the year that no one expected and start thinking about next year. You may also have a little bit of time to dedicate to thinking about your finances. We wanted to share a guide to getting a head start and smashing your financial goals in 2021!
Financial health check
Firstly it’s important to know your current financial situation. This will help you to set realistic goals and maximise your income.
Know how much you have
It might sound simple, but with life rushing past it can be easy to lose track. Take some time out to make a note of your income and outgoings every month. You might be surprised how much you are spending in certain areas. Try out our online Budget Planner.
Don’t hide from debts
Facing up to your borrowing can help you have honest conversations about how to tackle it. Find out what interest rate you are paying and then research to see if you could be paying less by transferring the balance or taking a consolidation loan.
Setting financial goals
It can be hard to save when you don’t have a specific thing that you are saving for. That’s also harder than ever when in 2020 those holidays we set our hearts on may have been cancelled. However it’s really important to have financial goal in mind which is both specific and realistic.
A goal can be something you’ve always wanted to buy (for example a car), a set amount of money (for example 2 months rent), or it can just be a feeling you want to achieve (for example, I want to not worry about spending a little extra on my birthday because I know I have saved it beforehand).
Make it happen in 2021
Don’t wait – save little and often
It can often feel like it isn’t worth saving until you have a good chunk of money to put away. But saving is a great idea however small the amount. Start small and once you get used to it you can always start increasing the amounts.
Do it on pay day
Whether it is repayments on your borrowing, saving, or both, it is always best to make these transfers on the day you receive your salary, benefits or other income.
If you are working for one of our salary deduction partners, we make that even easier for you by arranging to take the payments direct from your salary. If you are receiving child benefit we can arrange for you to repay from that too.
Give yourself some flexibility
As we now know, we never know quite what is around the corner. Being ready for financial bumps in the road can help you save money too. Overdraft rates can be very expensive and so they should be avoided. For our salary deduction members we offer Salaryflex – a flexible alternative to overdrafts. Or you could start saving with us today, allowing you to apply for our Saver Loan in the future.
We hope that following these tips helps you to achieve your financial goals in 2021.