Three financial resolutions for the new year

Covered mag, presented by Gocompare.com
  • | by Kristian Dando

Taking up a musical instrument, learning a language or packing in smoking are just a few of the resolutions that people are prone to making, if not always keeping, at the turn of a year. A new year also provides an ideal opportunity to reassess how you approach your own finances. And fortunately, there are plenty of ways you can take better control of how you spend your money. We've put together three simple, easy-to-keep ideas which could help you make your cash go a bit further in 2011 and beyond.

Clear your debts

The interest you accumulate on items which you’ve bought with credit cards and store cards can, over time, cost you a lot of money. A balance transfer credit card with a 0 per cent rate could help you clear the money that you owe, without having to pay extra to cover the interest too. Most cards of this type have a limited amount of time in which the 0 per cent interest period is set – usually around a year, although Barclaycard has recently introduced a new 17 month interest free credit card – giving you ample time to clear your debts without any extra interest. Switching your card will probably incur a cost (what the lenders call a ‘balance transfer fee’), but if you have a lot of debt then it might well be cheaper than the cost of interest payments.

Start saving

Putting a little money aside for adverse times might be a good idea. With the Bank of England’s Monetary Policy Committee leaving interest rates low, the options for savers aren't great. But if you are willing to invest some money for a longer period in exchange for better growth prospects there are options like certain individual savings accounts (ISAs) where your money is invested in the stock market or in bonds and gilts. These ISAs could make your savings work harder for you but carry more risk than the normal cash ISA. If you haven’t started already, putting money aside in a pension scheme might also be a good idea: recent home office statistics have revealed that one in six Britons will live to be 100, which may put immense pressure on the already-stretched state pension.

Consider switching your outgoings

Research from Gocompare.com has found that 25 per cent of British consumers have never switched providers for popular financial products like car, home or pet insurance, or their energy provider. These consumers are potentially missing out on the opportunity to save hundreds of pounds. Insurers, energy providers, and lenders aren’t in the habit of voluntarily passing on savings to loyal customers so it’s up to consumers to shop around for a better deal.