New Year, healthy finances

Funding a retirement, putting money away, and going on holiday are the top three financial goals for Brits in 2021. To help, here are some tips on how you can boost your finances.

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  1. Rob Morgan

We’re living in strange times. 2020 was not the year we thought it would be. Some benefited financially, saving on travel costs and luxuries such as not eating out or going on holiday. This meant that more than a quarter (26%) of Brits increased the amount they save regularly due to Covid-19. Yet for others, times have been tough. And one in five have had to dip into their savings just to maintain their standard of living and make ends meet.

As we kickstart a New Year, there’s never been a better time for fitter, stronger finances and getting your plans back on track. New research from Charles Stanley Direct found that funding a retirement, putting money away, and going on holiday are the top three financial goals for Brits in 2021, so to help here are some tips on how you can boost your finances.

graph showing saving goals

Top tips to help boost your finances in 2021

  1. Come face to face with your finances

Many of us dread sitting down and going through our finances, but without doing so it can be difficult to keep up with how much is coming in and out of your account. Creating a budget sheet that lists everything in one place will also help you to spot where you can cut back.

  1. Give your finances a MOT

Give yourself a financial MOT. At a time when we have so many subscriptions and financial products, it can be hard to keep track. Going through what contracts you have in place will help you spot whether you are overspending, where you can economise or get a better deal and check that you’re getting what you’re paying for. If you’re saving time on commuting then use that time to shop around and compare rates on utilities, car insurance, and mobile phone contracts etc.

  1. Define your goals

Do you know what your short term and longer-term goals are? Are you saving for a rainy day, to get on the property ladder, a holiday, or your retirement? Having an idea of what you would like to save for will spur you on to save more and reach your goals.

  1. Make the most of tax-efficient savings

Saving, particularly for your pension, may not be something you are thinking about right now, but if you don’t you could be missing out. Most people can receive extra money every time they pay into your pension pot through tax relief. Taking advantage of the tax benefits of a stocks and shares ISA by using as much of your allowance as possible can also make a difference and offer more attractive returns than a regular savings account.

  1. Don’t fall into the online spending trap

As parts of the UK continue to go into local lockdowns impacting where you can eat, shop, days out, and being more restricted to being at home, it’s easy to want to spend online. But, unless you really need an item, don’t fall into the ‘bored online shopping’ trap. Think about whether you really want and need the item. You’ll likely find that the reason you want it is because you can’t go to the shops.

  1. Don’t worry in silence

If you have concerns about your finances – whether it is income-related or savings and investments – you won’t be alone, so don’t suffer in silence. There’s help out there, whether it’s from your bank, your employer, financial adviser, or charities. Speaking to someone will help alleviate some of the worry.

  1. Watch out for the investment gap

An investment gap opened up over the last decade as savers opted for cash savings and typically received 94% lower returns than investors. To put this into perspective, £10,000 invested in global markets in 2010 would now be worth approximately £30,742, compared to just £11,230 in a cash savings account. Interest rates are exceptionally low at the moment, so consider whether investing would be a better option over the long term. A quarter (24%) of savers have admitted they haven’t tried investing but are eager to try.

 

To support first-time investors on their investment journey, we have launched a New to Investing hub, which provides a selection of resources including a free guide, articles and tips and a series of videos following the progress of novice investor, Erica.

 

This information does not constitute advice or a personal recommendation and you are recommended to seek advice concerning suitability from your investment adviser. The value of investments can fall as well as rise. Investors may get back less than invested. Past performance is not a reliable guide to future returns. Charles Stanley & Co. Limited is authorised and regulated by the Financial Conduct Authority.

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