A new year is upon us and what better time could there be to make a fresh start.
For many of us, our bank balances are feeling rather battered right now and the next pay day seems way off over the horizon...
It might seem like bad news, but actually, it’s a great prompt to make a plan of action for some financial new year’s resolutions that will stretch your money further in 2015.
Here are some ideas to get the year off to a rosier start:
Is it worth switching your current account?
Many banks and building societies have ramped up competition to attract customers over the last year, following industry-wide rules which were introduced in late 2013 to make it easier for people to ditch their old current account provider and switch to a new one.
The new switching rules mean it’s quicker to switch and outgoing and incoming payments are automatically moved over to the new provider.
A guarantee is in place which means that if anything goes wrong with the switch, you shouldn’t be left out of pocket as a result.
Several providers are offering cash to move to them. For example, Halifax is offering £100 to switch, the Co-operative Bank is offering £100 plus a £25 donation to charity and Clydesdale and Yorkshire Banks are offering £150.
Some providers are offering particularly attractive rates of interest on their current accounts in the low interest rate environment.
Nationwide Building Society and TSB both have current accounts that offer a 5 per cent interest rate, while Santander’s 123 current account offers interest of 3 per cent plus cashback on bills.
You’ll need to consider how you use your account and consider whether you’re usually in credit or overdrawn to gauge which is the best-value deal for your personal circumstances.
Get into the savings habit
Recent research from consumer group Which? found that successful savers tend to see saving as a habit and put money away regularly, no matter how much or how little.
Savers haven’t exactly had it easy finding decent returns for their cash in recent years as the Bank of England base rate has remained at a historic 0.5 per cent low. But at least in 2014 they were handed the freedom to put more cash away tax-free, when the annual Isa allowance was increased to £15,000.
People can save this annual limit in cash, stocks and shares, or any combination of the two.
In the recent Autumn Statement, Chancellor George Osborne confirmed that, from this April, the new Isa limit will be increased to £15,240 for the new tax year.
Households are generally recommended to have at least three months’ worth of essential spending put by to protect against sudden income shocks such as illness or a job loss.
And with speculation that the base rate could start to climb at some point on the horizon, if you have built up some savings, you’ll be ready to take advantage of any interest rate rises.
Stick to a budget
Having trouble juggling what’s going in and coming out of your account? There are tools that can help.
First Direct has just launched a mobile savings app that can be downloaded for free onto iPhone devices.
The “saveapp” aims to help people resist the temptations of small, everyday spending such as a morning coffee or a lunchtime treat, and save towards bigger goals.
The free, independent Money Advice Service also has a “budget planner” on its website at www.moneyadviceservice.org.uk/budget and a “cutback calculator” to help people identify aspects of their lives where they could save money at www.moneyadviceservice.org.uk/cutback .
Won’t use it? Sell it
Many of us will have received unwanted gifts this year, and many others will have made impulse buys in the sales that we can’t necessarily return.
If you’re sure it won’t cause upset to loved ones, it might be worth putting that reindeer jumper or any other item that you won’t use up for sale on a website such as eBay.
If you’re unsure how much to ask for your item, searching for “completed” or “sold” listings on eBay will give you an idea how much money similar items sold for.