Whether you’re looking for some inspiration for the new year or want some top tips on how to achieve some common money goals, we’ve got you covered. Here are our top five financial resolutions for 2023 and how you can achieve them.
1. Create a budget and stick to it
A budget gives you a clear picture of what you’ve got and what you can afford. It’ll help you keep track of your money and work out if there’s an opportunity to cut back a bit.
Start by writing down everything you count as a necessity and the amount you pay for it – include everything from rent to your Netflix subscription. Add it all up then take the total away from your monthly salary. What’s left will be the amount you have to cover your ‘wants’ and your savings. Your ‘wants’ will cover everything from socialising, takeaways and trips to the coffee shop, while your savings are for rainy days, holidays or any personal goals.
If you’re not sure how much to allocate to each pot, you could try the 50/30/20 method. This breaks your spending down to 50% for needs, 30% for wants and 20% for savings. You can change the split each month depending on where you need to allocate your money at the time.
Keep in mind that prices are rising quickly just now. So you could find that the cost of your ‘needs’ may increase throughout the year. To keep on top of things, make sure you regularly review your budget and adjust it when you need to. That way it’ll stay achievable and you’ll find it easier to stick to.
If you need help creating a budget, MoneyHelper has a budget planner tool which can help you create a plan. Or read our article for inspiration on why a budget can help you.
2. Make a dent in your debt
Interest rates are on the rise – 3.5% as of December 2022 – so you might be paying more interest than you’re used to on any debt you have. It’s predicted that interest rates could rise even further in 2023, so prioritising paying off your debt where you can could be a good financial goal.
Use the budget you’ve created to understand how much you can afford to put towards any debts. Or think about consolidating your debts to get a potentially lower interest rate.
Everyone’s circumstances are different though, so do check if paying off your debt early is right for you. For example, you might find you’ll need to pay an early repayment charge to your provider, or would be better off having any extra money in an emergency fund.
If you’re finding debt hard to manage just now, there are places you can turn to for help. Try Citizens Advice or National Debtline for free advice.
3. Save for a personal goal
We’ve all got personal goals we want to save for. Whether that’s a new home, a wedding or even just having a sense of security in an emergency fund.
You might find that, with the rising cost of living, you don’t have as much disposable income to save just now. But what you could do is find the right place for whatever you can put aside, so your money can work harder for you.
For example, if you’re saving for your first home, you could consider saving into a Lifetime ISA (LISA). With a LISA, you can save up to £4,000 each tax year and get a 25% bonus from the government on top of your savings. So, if you save £4,000 each year, you’ll get an additional £1,000 on top.
However, a LISA has very specific terms for penalty-free withdrawals. You need to:
- use the money for your first home, or
- be aged 60 or over, or
- be terminally ill.
For other medium to long-term goals such as a wedding, new car or special trip abroad, you might find a Stocks & Shares ISA could make your money work harder. By investing your money, you give it the opportunity to grow over time - something that's particularly important when you’re investing over a longer period of time and while inflation rates are high. Cash savings have less risk but unless you’re receiving an interest rate that keeps pace with inflation, your savings could buy you less in the future.
Remember the value of investments can go down as well as up and may be worth less than was paid in.
4. Improve your credit score
Your credit score can affect your ability to borrow money or get access to products like credit cards or loans, which you might find useful to help manage your money.
You can check your credit score for free using websites like ClearScore. If you find it needs a bit of TLC, there are some steps you can take to improve it. Here’s an example of a few:
- Register to vote
- Make sure your address is correct
- Pay your bills on time
- Build up your credit history
- Check for any mistakes on your credit report
You can find some useful tips and resources for improving your credit score on MoneyHelper’s website.
5. Put more towards your future
Is 2023 the year you want to focus on future you? Putting some of your income towards your retirement if you can afford to is a sensible choice no matter your age.
Your pension plan is designed to be a tax-efficient way to do this. Thanks to pension tax relief, it’ll cost you less thank you might think to pay more into your pension plan. Plus, if you have a workplace pension, your employer may contribute too. Some will even offer matching schemes where they’ll match your payments up to a certain percentage. So it’s worth making sure you’re getting all of the benefits you’re entitled to.
You can find out more about your pension plan and how the tax benefits work in our Pension Basics guide.
If you’re a Standard Life customer you can review and change your pension payments online by logging in or downloading the app.
The information here is based on our understanding in January 2023 and shouldn’t be taken as financial advice.
A pension is an investment and its value can go down as well as up and may be worth less than was paid in.
Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.
Standard Life accepts no responsibility for information in external websites. These are provided for general information.