With New Year just around the corner, it’s a good time to think about your future in terms of your financial security. Making a few key changes in 2019 which turn into a good money habits can set you on the right path and positively impact you for the rest of your life.

With that in mind, here are some financial resolutions which could improve your prospects.

1. I will keep a spending diary

A diary of where your money is going is an effective way to help tackle any overspending concerns. It’s all too easy to forget about small purchases using contactless or by shopping online. Detailing your expenses and putting these down on paper means you can keep track of where your money is going. If you prefer tech, there are plenty of apps and tools which can help at the touch of a button.

Of course, a diary alone isn’t enough. You should also be looking at where you can cut back, if necessary, and how to make the most of your money.

2. I will start/grow my emergency fund

If you don’t already have an emergency fund, starting one can significantly boost your financial security. The recommended amount to have in an easy-access savings account is between three and six months’ salary. This means you have a buffer to overcome financial shocks, from an unexpected bill to losing your job.

If you already have six months’ salary saved, it may be best to start looking at alternatives. Low interest rates likely mean your money is losing value in real terms. Alternatives to consider are investments or a fixed rate savings account where your money is locked away for a defined period.

3. I will reduce the amount of debt owed

Debt can mean your outgoings grow, and much of the repayment is likely to be paying off interest rather than the money borrowed. If you’re at a stage in your life where you still have debt, such as credit cards or car finance, making a commitment to reduce this can vastly improve your financial security.

Overpaying by even a small amount can cut down the total amount of interest you’ll pay significantly. Reducing or eliminating debt altogether in 2019 can help put you on the right path for the future.

4. I will increase my pension contributions

Giving your pension contributions a regular monthly boost can help you reap the rewards when you retire. As the money is usually invested, you will hopefully see returns on your efforts that outweigh inflation and interest. Plus, you may also benefit from employer contributions and tax relief.

If you pay into a Workplace Pension already, be aware that minimum auto-enrolment contributions will automatically increase in April 2019.

5. I will overpay my mortgage payments

A mortgage is one of the biggest financial commitments. It’s not unusual to be paying your mortgage 30 or even 40 years after the purchase. As a result, the accumulated interest over the years is significant. Making regular overpayments or paying off lump sums can cut down the total interest paid and means you’ll own your home sooner.

It’s a resolution that can have more immediate benefits too. Paying extra means you’ll own more equity in your home, which typically means you’ll be able to access lower interest rates when remortgaging. Be sure to check your terms first though, some lenders may charge you for overpaying.

6. I will start/grow my investment portfolio

Investing can be an excellent way to grow your money. Once you’ve built up a savings account, putting regular amounts into investments can mean the opportunity to generate returns above interest rates. Ideally, you should be investing with the view of holding stocks and shares for at least five years, this helps to smooth out dips in the market.

When you’re investing, be sure to consider the level of risk you’re willing to take and how well-placed you are to withstand potential losses.

7. I will create a long-term financial plan

Don’t just focus on the immediate financial goals this year, look at your wider objectives too. The steps you take now could help them turn them from a dream to a reality. Thinking about what you want to achieve should be your first step. From here you can start to create a strategy that’s aligned with what you want.

This is an area where financial advice can be invaluable. We’ll help you understand how your current finances are suited to your goals and the steps you should be taking to secure the future you want.

If you’d like help getting to grips with your finances in 2019, please contact us. We’d be happy to discuss steps that could improve your long-term financial security and how we can add value to your plans.

Please note: A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.