We’re thinking to the year ahead and what we want to achieve. Taking control of our money to get the most out of it and achieve what we want in life always tops the bill (no pun intended!). If you too want to take better control of your money in 2020, follow our money matters tips below for good money habits.
It all starts with good account management and we’ve an entire feature dedicated to it. Outlining a strategy and implementing it for the moment your money hits your account is an essential component to taking control. In this feature we talk about how you should distribute your money between bills, savings and spending including how you can drip feed your spending money to ensure you don’t go overboard.
A change in your habits can be a little hard to get use to but it soon becomes second nature and you’ll soon feel better off for the adjustment.
Save here there and everywhere
There are lots of ways to save money. In addition to putting a little aside at the start of the month or week, depending on when you get paid, you can save money on almost everything. Get into the habit on using Topcashback to save money on everything from utilities to everyday items. Over the past year I’ve claimed back over £200 in cashback and that’s even forgetting to use it on several occasions.
Be sure to also look to voucher sites before making any purchase and if you’re heading out to the shops, try limiting yourself to what’s on sale or on offer to feel like your getting a good deal. It’s also worth checking loyalty schemes for discounts. O2 Priority offer their customers a discount on a range of products and services as do Boots and other well-known brands.
We need to be realistic of what we can expect our income to be when we retire. It can be all too easy to worry about it another day but make 2020 the year to take charge when it comes to your pension.
There are generally three components to your pension: your state pension, made up of NI contributions over your working years, your workplace pension and a private pension.
You can find out how your state pension is calculated and what you can expect to receive when you retire right now. There is a minimum and maximum number of years of contributions you need to make in order to receive anything from the state upon the determined retirement age. What is within your control when it comes to your pension is the number of years you contribute. Other than that, you cannot draw from your state pension until determined retirement age.
This was introduced in 2018 where all businesses who employ at least one person have to offer a workplace pension. This is where you contribute a percentage of your total salary to a pension scheme. In most cases, your employer will also contribute to your pension scheme giving you, basically, free money. You will automatically be enrolled for the scheme and the only way to reject it is to opt-out.
These could be plans set up under previous organisations, through financial advisors or even ones you set up independently. Rather than coming out of our salary though, you’ll make a standing order to them each month. Every year you’ll receive an update as to where your money was invested, what it currently amounts to today and what it could look like by your retirement age.
If you’re unsure where to start, it could be beneficial to speak to a financial advisor to see what you could and should be doing. We’ve also compiled a number of articles that are well worth a read, including getting started and reading your annual statements to understand your financial position.
Don’t shy away from your statements
If you’re losing track of your spending, commit to reviewing your statements on a monthly basis. When you use your card, it can be hard to see the connection between the transaction. Go through all of your statements, make sure everything is accounted for and see if/where you can make any cutbacks.
For example, you buy coffee once a day at £3 (that’s £15 a week, £60 a month), there are lots of ways you could save money.
If you use a credit card, make sure your paying it off at the end of the month so you’re not incurring any interest on purchases. Not able to that month? You know you need to make extra allowances to pay off the excess next month.
Inspired? From getting the best deals on your 2020 holiday to preparing for the future, these other money matters features are well worth a read.