Getting a grasp on your finances is on many people’s resolutions list. If you adopt healthy financial habits, you’ll set yourself up for a more financially stable future and it can help keep you on track with any goals you might have, from buying a new car to saving up for a deposit. Reports show that the average weekly household spending in the UK between April 2019 and March 2020 was £587.90 and while part of this spending will be reserved for essentials, a lot of the time, we while away our money on things we might not need. Here are five financial habits you might want to adopt in 2023.
- Track your spending
There are plenty of finance and budgeting apps available. If you find the right one, it may help you adopt life-changing habits in terms of how you approach money. Having a visual overview of your spendings each month will help you decide whether you need to cut back in some areas.
- Start saving every month
If you cordon off a proportion of your income each month, this will help you get an overview of how much you should be spending on luxury items, while ensuring your money for essential payments are left untouched. Why not set up a direct debit to a savings account and deposit money into it each month?
- Hold off impulse buying
Taking time to consider whether you truly want an item will help you save money in the long run. In many cases, you’ll realise you don’t actually need it – and if you do still want to buy something after this time, then at least you know that you do truly have a use for it.
- Avoid monthly payments
This is where the phrase ‘if you can’t buy it twice, you can’t afford it’ comes into play. Often, people will choose to pay in monthly instalments, when in reality, the best option is often to save up and pay for it in one transaction. Otherwise, it’s easy to fall into the trap of setting up multiple smaller payments and racking up a huge amount of money in the process, because it hinders the visibility of what you are spending.
- Strat paying off debts
Settling any debts as soon as you can means you won’t have added interest looming over you. Start off by prioritising which debts to pay off first. Anything that could compromise your living situation, such as heating, should be top of the list. Then, identify what your most expensive debt is and start to chip away at that. Remember, you can always get free debt advice from the Citizens Advice or any debt charities, such as StepChange.
