As we say goodbye to the challenges of 2023, let’s bring in a fresh start for your finances in 2024.
From exploring energy-saving tactics to checking the benefits you’re entitled to, these practical resolutions aim to help you strengthen your finances.
1. Refresh your budget
In the wake of a tough year of rising food prices and soaring household bills, it could be worth reevaluating your income and outgoings to see where you stand. Here are five practical steps for budgeting:
- Organise your finances Gather bank statements, credit card bills, mortgage payments, rent agreements, energy bills, mobile/broadband bills and income details.
- Calculate your income List your regular income sources, such as salary, pension (if applicable) or freelancing. If you’re a freelancer or have different sources of income, average your earnings over the past three months for a reliable estimate.
- Identify essential spending Categorise and calculate essential expenses, such as your mortgage, utilities and groceries.
- Evaluate disposable income Examine past spending habits. Are there any obvious savings you could make this year based on your previous patterns? For example, do you still use all your subscriptions?
- Create a practical budget Use the 50/30/20 rule for essentials, non-essentials and savings.
Once you have a budget, make sure to regularly review and adjust it as your circumstances change.
- Find out more: read our tips on how to budget for the techniques you need to stay on track.
2. Stop auto-renewing
Car and home insurance premiums have soared this year.
According to the figures from the Association of British Insurers, car insurance premiums have rocketed by 29%, while the typical quoted price of home insurance jumped by more than 36%, according to price tracker Consumer Intelligence.
One way to save is to opt out of automatically renewing your insurance and make sure you shop around for a new deal a few weeks before your policy expires.
Even though insurers are no longer allowed to offer new customers better prices than existing customers, you may be able to find a cheaper deal or better cover elsewhere for your circumstances.
3. Explore energy-saving tactics
The energy price cap will rise in January 2024. The cap applies to what you pay per unit of gas and electricity on standard variable tariffs, which many of us are now on.
However, as it’s the cost per unit that’s capped, rather than your overall bill, reducing your usage could reduce or even reverse the effects of the increase.
For example, try washing your laundry at 30ºC (instead of 40ºC). This one step can reduce the cost of doing a load of laundry by 38%, according to our tests.
- Find out more: 10 ways to save on energy bills.
4. Haggle on your bills
It’s easy to end up paying over the odds for your broadband service. Introductory offers tend to last 12, 18 or 24 months, and prices often rise automatically once your contract has ended.
Switching is one way to save money, but if you’re happy with the service you might want to stay. If this is the case, it’s worth negotiating a better deal.
In our survey of more than 5,000 people whose contracts had ended in the past month, we found that around half had negotiated with providers to get a better deal for their broadband, TV and broadband or mobile phone network.
On average, haggling saved £43 annually for broadband customers and £90 for those with combined broadband and TV. But the biggest savings were achieved by hagglers who downgraded their deal, with TV and broadband customers pocketing £213, on average, and broadband-only users saving £158.
- Find out more: how to haggle for the best broadband deals.
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5. Get on top of credit card debt
The average credit card debt per household was £2,409 in September 2023, according to The Money Charity, and it’s likely to have grown bigger over the festive period.
If your credit card debt is attracting high levels of interest, consider using a 0% balance transfer credit card, which can freeze your current interest rate and accelerate the debt repayment process.
This card allows you to transfer existing credit card debt without incurring additional interest charges. Some cards may have a one-time transfer fee, but fee-free options are also available.
For example, a £2,500 debt on a card charging 18.9% APR that you pay £100 a month towards would take you two years and seven months to pay off. But by moving the balance to a 25-month 0% balance transfer card with no fee, you could repay the debt six months earlier with the same £100 monthly payment and save £629 in interest.
- Find out more: check out our tips on paying off your debts for the steps you can take to regain control of your finances this year.
6. Check what help you can get
Explore the benefits and tax perks you might be entitled to that could help boost your finances.
Life changes, such as getting married, having kids or changing jobs, can impact what benefits and tax credits you qualify for.
Entitledto.co.uk has a benefits check-up tool that can help you figure out what you could get.
7. Up your pension contributions
In a workplace pension with defined contributions, the minimum total contribution is 8% — you contribute 5% (which includes a 1% boost from pension tax relief) and your employer adds 3%.
However, some employers match your contributions, so if you can increase them, even just by 1%, it could make a big difference to your pot in the long run – especially if you start early.
- Find out more: 6 questions to ask about your pension to check if your retirement savings are on track.
8. Get ready to remortgage
Mortgages are now priced significantly higher than they were two years ago, meaning borrowers who need to switch deals in 2024 will face much higher repayments.
So check your mortgage agreement to find out when your deal ends. If you’re near the end of a fixed term start shopping around for a new deal now. You can usually secure a new mortgage six months before the end of your current one.
It’s worth checking what your current lender will offer you as well as what you can get elsewhere. To start your research, you can check out our guide on the best mortgage rates.
9. Make time to make a will
Research from Canada Life in March 2023 found that one in two adults don’t have a will in place.
Making a will can give you peace of mind that your money and assets will go to the intended people.
Before writing your will, think about who should inherit your important assets and any other wishes you have. You can use our free and easy wills planner tool to help, including who will execute it and who will benefit.
- Find out more: if you want support, you can make your will and have it reviewed by Which?.
10. Plan for the unexpected
While it’s important to be hopeful for the year ahead, it’s also wise to plan for the worse.
One consideration is how your loved ones would cope financially should you pass away.
A life insurance policy can replace lost income, settle outstanding debts and cover childcare expenses, tailored to your specific needs – and it doesn’t have to strain your budget.
- Find out more: check out our guides on how to cut the cost of life insurance and how to find the best life insurance policy.
Which? Limited is registered in England and Wales to 2 Marylebone Road, London NW1 4DF, company number 00677665 and is an Introducer Appointed Representative of the following: 1. Inspop.com Ltd for the introduction of non-investment motor, home, travel, pet, van and temporary insurance products (FRN 610689). Inspop.com Ltd is authorised and regulated by the Financial Conduct Authority (FCA) to provide advice and arrange non-investment motor, home, travel and pet insurance products (FRN310635) and is registered in England and Wales to Greyfriars House, Greyfriars Road, Cardiff, South Wales, CF10 3AL, company number 03857130. Confused.com is a trading name of Inspop.com Ltd. 2. LifeSearch Partners Limited (FRN 656479), for the introduction of Pure Protection Contracts, who are authorised and regulated by the FCA to provide advice and arrange Pure Protection Contracts. LifeSearch Partners Ltd is registered in England and Wales to 3000a Parkway, Whiteley, Hampshire, PO15 7FX, company number 03412386. 3.Which? are an Introducer Appointer Representative of Optimise Media Limited (FRN 313408), for the introduction of HSBC Group, who are authorised and regulated by the Financial Conduct Authority to provide credit brokering activity. Optimise Media is registered in England and Wales to Exchange Street Buildings, 35-37 Exchange Street, Norwich, England, NR2 1DP and company number 04455319. We do not make, nor do we seek to make, any recommendations on financial products or services that are regulated by the FCA, as we’re not regulated or authorised by the FCA to advise you in this way. In some cases, however, we have included links to regulated brands or providers with whom we have a commercial relationship and, if you choose to, you can buy a product from our commercial partners. If you go ahead and buy a product using our link, we will receive a commission to help fund our not-for-profit mission and our campaigns work as a champion for the UK consumer.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.