The New Year is the perfect time for renewed motivation in every aspect of our lives. Whether it’s going running twice a week, stopping smoking or reducing your drinking, January is the month when we are full of good intentions and ready for a new challenge.
The same applies to our financial lives. Many people start the year with a financial to-do list and goals that they want to achieve. But what are the most popular financial resolutions people are setting this year? Let’s take a look.
- Save more
Perhaps unsurprisingly, the most popular financial resolution this year is to save more money. Nearly half (49 percent) of the respondents to a recent Experian study said they wanted to put more money away every month. There are lots of different ways you can do this, from budgeting more effectively to cutting back on unnecessary spending and transferring your existing savings into a high-interest account.
- Improve your credit score
Building a good credit score is one route to affordable and accessible credit. If you’re looking to borrow money, whether it’s a short term loan from a lender like Wonga or a mortgage from the bank, taking steps to improve your credit score will allow you to access the best possible rates. Find out more about the steps you can take to boost your credit score.
- Create a personal budget
31 percent of the respondents to the Experian study said 2020 would be the year when they created a personal budget. Tracking your money and seeing where it goes every month can be a hugely valuable exercise. It can help you reduce your spending in certain areas and assign more of your income to debt repayments and savings.
- Pay off a credit card entirely
Are you stuck making the minimum payments on your credit card and unable to clear the balance? This could be the year when all that changes. If you have a credit card debt you’re struggling to clear, a balance transfer credit card, which offers an interest-free period of up to 24 months, could give you the breathing space you need to finally clear that credit card debt.
- Pay your credit card balance in full every month
Have you ever thought about limiting your credit card spending to an amount you can afford to pay off in full every month? Repaying your full balance at the end of the month will help to improve your credit rating and reduce the amount of money you waste in interest payments and fees.
- Not open any more credit cards
A positive step that 20 percent of respondents said they wanted to take this year was to not sign up for any more credit cards. The average number of credit card accounts per South African consumer increased from 1.4 to 1.5 over the last year, with an average debt of R16,481. There’s no right number of credit cards, it all depends on how many you can manage responsibly. However, as a very simple rule, the fewer you have, the better!
What are your financial resolutions for the new year? Please share yours with our readers in the comments below.