New year’s resolutions for your wallet

However much you have or don’t have heading into January, here are the pledges that could make all the difference in 2020

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You’re tried learning a language, getting fitter and shifting a few kilos. Possibly all at once, and possibly with varying levels of success.

But now that the first day of the new decade is approaching fast and the indulgent, devil-may-care days of Christmas proper are behind us, it’s the business end of the holidays. It’s resolution time.

If your hopes for a little personal improvement in 2020 are all about the money, here are some ways to make a difference and stick to it this year.

Start a money club

Start a club with your friends that focuses on any aspect of money, so a savings club, an investing club, or a paying-down-debt club.

First, it will start you talking about money with those closest to you. People are more likely to discuss their sex lives than their finances, so to break this taboo Britons needs to start talking about money.

Much like diet clubs or antenatal groups, having the support of people who are in the same situation as you will also help you to learn tips and tricks to achieve your goals – as well as hold you accountable.

Tackle a bill a month

Millions of people have lapsed from their initial-offer rates onto the standard rate for all manner of bills, from electricity and gas to TV services and the gym. Pick one bill each month and cut the cost.

This can be as simple as calling your current provider and asking what their best rate is. It’s low hassle and often yields results. If you invest a bit more time you can research other providers, check which is cheapest and switch to save more. Either way you’ll end the year better off.

Build an emergency fund

One in eight UK adults have no cash savings at all, and a further third have savings of between £1 and £1,999. This means that lots of people will struggle if they have an unexpected cost, or run into financial problems. It’s easy to just say “save more” but if you squirrel away a little bit of money each week or month it can add up – even if you start with a small amount. You can also use rounding-up services offered by many banks, where they round up your purchases to the nearest pound and save the difference.

Commit to ‘no spend’ days

“In the same way that the government advocates ‘drink-free days’, and others have opted for meat-free Mondays, you should commit to at least one ‘no spend’ day a week – or more if you can manage it,” suggests Laura Suter, personal finance analyst at investment platform AJ Bell.

“The idea is that by avoiding spending any money on one day it will make you more aware of the money you spend on other days – and will also highlight areas where you’re spending without thinking.”

Stop ignoring your pension

Millions of employees now have money coming out of their salary each month into their pension, thanks to auto-enrolment on their workplace scheme. At the very least you should make sure you know who your provider is, how much you’re paying and what that money is invested in.

If you want to go one step further you could use online calculators to look at how much your pot is likely to grow to by the time you retire – and so whether you’re putting enough in, and also think about changing the investments.

Start saving for your children

If you’re fortunate enough to have some spare cash each month that you can lock away, get around to opening that savings account for your child. Putting away small amounts when they are little can really add up, and help to pay for costs such as university, buying a car or a house deposit in the future.

“Putting away just £100 a year every year since a child was born can add up to £3,000 when they turn 18, assuming it’s invested and gets 5 per cent a year growth after fees,” says Suter.

“Putting away £50 a month would equal more than £18,000 by the time they turn 18.”

Only invest when it fits

“Investment ideas and recommendations are not usually bespoke to individual investors,” says Adrian Lowcock, Head of Personal Investing at Willis Owen. “Therefore, it is important to think about how a new fund purchase would fit into your portfolio. Make sure you have a mix of bonds, equities, commodities and other investments that match your risk appetite.”

Ask yourself how it will affect your risk exposure, liquidity and diversification. Don’t be easily lured by clever marketing material, and instead seek professional opinion on the fund’s ability to meet your individual goals.

When you do buy, try to live by the ‘buy low sell high’ mantra.

And don’t forget to review your investments every year – a surprising number of investors don’t.