It’s January once again! Despite this article being about new year’s resolutions, we’re not here to advocate a “new year, new you”. You don’t need to change who you are just because you’ve bought a new calendar. But the beginning of a new year can be an exciting time to set new goals and reflect on your financial situation.
Why set financial resolutions?
When setting resolutions, we can sometimes be a little too ambitious, causing us to give up before spring even hits.
However, realistic resolutions for money can make you more pragmatic so you’re better equipped to tackle the unexpected. They put you in control of your cash, which is something we could all use at the moment considering inflation rates and soaring bills.
We’ve just waved off a turbulent year and there’s more uncertainty up ahead, so putting a plan in motion now can help you weather any financial storms that come your way. With that in mind, here are five realistic money resolutions to improve your finances in 2023.
Money resolution #1: Start saving
A 2022 survey by Finders showed that 1 in 5 people living in Britain has no savings. In 2023, if you set aside even a small amount each month, you can build up a nest egg to reduce any financial stress and fortify your financial resilience.
When choosing where to put your savings, it’s crucial to bear in mind the interest rate you’re offered. Nothing stays the same for long in today’s climate, so have a look around and find companies that give competitive rates while allowing you to compound the interest you receive. For example, Plum’s Easy Access Interest Pocket* offers up to 1.95% AER and compounds interest, meaning you’ll be able to maximise your returns.
*Easy Access Interest Pockets are provided by Investec Bank Plc.
Money resolution #2: Get educated on personal finance
If you’re struggling to wrap your head around the ins and outs of personal finance, getting educated on money could be the best resolution for you. Improving your financial literacy comes with a range of advantages, including the following:
- It promotes good savings habits and smarter financial decision-making.
- You’re more likely to build healthy spending habits and improve your credit score.
- You’ll experience less anxiety around money matters.
- You’ll feel more confident and therefore more capable of reaching your long-term financial goals.
There’s a mountain of books that can help you learn more about personal finance but online resources can be just as helpful. For instance, the Plum Blog is brimming with educational content on everything from setting aside money to investing for the first time.
Regardless of where you get your content, do your research and make sure you’re learning from a reputable source.
Money resolution #3: Protect your financial future
In today’s economic climate, it’s a good idea to be cautious. Protecting your financial future might involve creating and contributing to an emergency fund so that you’re always ready for whatever life throws at you.
If you’ve got your emergency fund sorted, it could be wise to think further ahead to your retirement. It’s not the most glamorous of goals, but building a retirement fund is a must if you want to spend your golden years relaxing instead of stressing about your income.
You can read more about saving for retirement here.
Money resolution #4: Boost your earning potential
If you’re doing all the right things — saving more, spending less — but still feel like your money doesn’t stretch far enough, a good resolution could be to increase your earnings.
Here are some ways you can boost your earning potential in the new year:
- Negotiate your salary with your employer. Be realistic and be ready to justify your request by researching what others in your industry are earning.
- Be open to new job opportunities.
- Put yourself out there and network with people to increase your visibility in the job market.
- Start a side hustle by freelancing on the side (remember to check your employment contract to ensure this is allowed).
Money resolution #5: Treat yourself
Although saving up for the long term is important, you’ve worked hard for your cash and deserve to treat yourself from time to time. So whether it’s an overdue holiday or something special for your birthday, spend some money on yourself this year.
To make this resolution more manageable, you could take on the 52-week challenge, where you start off with just £1 in the first week, £2 in the second week, until the final week of the challenge when you’ll set aside £52. This will give you a total of £1,378 at the end of the year to spend on yourself and some self-care.
Keep your financial resolutions with Plum
Whatever you’re working toward this year, we’ll be on the journey with you. Whether you want to set more money aside, start investing (capital at risk), or just manage your money better in 2023, Plum has something for every resolution. The app also uses automation and AI, which can make sticking to your resolutions a little easier.
Plum is free to use, and we offer different subscription options so you can find a plan that works for you. So start the year off right, and download Plum today.Download Plum
Find out how Plum keeps your money safe here.
Please remember that your capital is at risk if you invest. You shouldn’t invest in or deal in any financial product unless you fully understand it and the inherent risks. When you automate and invest, you should be satisfied your choices are suitable in light of your circumstances and position.
The information contained in this article is for general guidance only and is not intended to constitute investment advice or any other advice or recommendation.