If 2022 has been a year you’d rather forget financially speaking, the new year presents you with the chance to wipe the slate clean and start as you mean to go on. With a likely recession in 2023 and no end to the tough times in sight, now’s the time to take action to protect your finances with our 6 money makeover tips.
Money Makeover Tips
1. Reduce your regular outgoings
Easier said than done you might think, but even if you’ve spent most of 2022 watching the pennies, there may still be steps you can take to reduce your spending. Finding a cheaper mobile phone and broadband plan, doing your grocery shopping in the cheapest supermarkets, walking or riding a bike as much as you can, skipping coffees and lunches out, and taking small steps to reduce your energy usage (such as lowering your combi boiler flow rate) are all easy ways to cut your regular spending.
2. Rein in your major expenses
Although the above steps can lead to small changes in your spending, it’s the major expenses such as running your car and paying the mortgage that really drains your finances. But the good news is, there are still things you can do.
If you’re going to struggle to get by in 2023, consider asking your mortgage provider to spread your repayments over a longer period. In the long run, it’s not a great move, but it will free up some cash while times are tough. Similarly, if you own two cars as a family, think about whether you could potentially manage with one. Joining a car-sharing club, using public transport, or simply planning better and sharing one car could all be viable and cheaper alternatives.
3. Consider a side hustle
A side hustle, which is a second job alongside your main role, can help to bring in some handy extra income. With platforms like Deliveroo and Uber allowing you to sign up for instant driving and delivery work and a job market with a record number of vacancies, there’s plenty of scopes to generate a second income should you need to. INC.com has a great guide to the side hustle here, they’re not sharing a list of overdone ideas but rather sharing guiding principles to how the side hustle principle works, well worth a read.
4. Open a high-interest savings account
At times of high inflation, you need to make your money work for you. If you don’t, its value will diminish all too quickly. While rising interest rates are bad news for your mortgage repayments, you can get more interest on your savings. A quick google search will produce a plethora of comparisons, just be careful to check that you’re actually getting the best deal as many websites will be working on a referral basis so they can be biased towards directing you towards whichever bank is paying them the most, not necessarily what the best product for you is.
5. Set realistic financial goals
The new year is a great time for goal setting, and it’s only a few weeks away now. There are all sorts of ambitious financial resolutions you can set. Whatever you choose, make sure your goals are realistic, achievable, and measurable. Wonga’s guide to financial resolutions here is full of great tips to help you choose the right money-focused New Year’s resolution for you and gives guidance to help you actually keep the resolution too. This is by far the better way to approach your financial goals for the New Year – If you start with a conservative goal that you can actually sustain you are much more likely to continue working on those goals the whole year through.
6. Don’t panic!
Yes, times are hard and your finances might be much tighter than you’re used to, but whatever situation you find yourself in, don’t act rashly. Now is the time to make sure your financial fundamentals are on track rather than making any hasty decisions. As long as you can keep your expenses below your income by using one or a combination of the steps above, things will start to get easier. Good luck and have a Happy New Year!