Manage your finances better in 2022 with 4 key tips – achieve ‘long term success’

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Managing money does not have to take a lot of time, there are some easy ways that people can take control that can help set them up for long term success. James Norton, Head of Financial Planners at Vanguard spoke exclusively with about simple tips people can use when thinking about their savings for the new year.

He said: “Managing your money doesn’t have to take a lot of time, some simple measures can have a meaningful impact on your finances and help to set you up for long-term success.

“It doesn’t have to be difficult, and it doesn’t have to be boring. Make yourself feel better about your financial future this New Year, it will make all the difference.”

1 Emergency fund
Mr Norton explained having a rainy-day fund/emergency fund is essential.

He suggested that people should set up a regular standing order soon after their pay day to go into their savings account.

“Several bank accounts have a round up or savings pot functionality which can help you to save small amounts every month,” he said.

2 Best rates
Additionally, he mentioned that people can shop around for the best interest rates.

Mr Norton added: “The best rates may not be providers you are familiar with so always check that they are part of the FSCS compensation scheme, as this means your savings are protected should the provider fall into financial difficulties.

“Look at switching bank account, at the moment there are many banks/building societies offering cash incentives from £100-£150 to switch current accounts.

“But please be aware that there can be terms and conditions associated with this, ie a set monthly deposit is required, typically £1,000 per month and/or at least 2 active direct debits to be set up on the account.”

3 Have a goal
In order to succeed with new year’s resolutions, especially financial ones, it’s important for Britons to have a plan and stick to it.

People should set goals and know why they want to achieve them before making resolutions.

Mr Norton continued: “Have a plan and stick to it. Think about your goals and why you want to start saving, write them down and use them as a focus for making your plan.

“Be excited by your plan and refer back to it, keeping it alive and relevant. Don’t worry if you don’t always live up to your original ideals.

“If you drift off course, adjust the plan and sail on. If you do stick to it, you’ll be proud of yourself, and every day a little bit richer. Two easy wins!”.

4 Invest
Mr Norton went on to discuss the benefits of compounding to encourage people to start as soon as possible due to the potential returns that people can make.

He did warn however that with investing, people can lose money as well as gaining it.

He said: “Start small and save more. Small amounts add up, and if you want to invest your savings, compound interest means the sooner you start the better.

“Be disciplined. This is the one people often find the hardest. Like any area of life, if you’re to be successful, discipline is important.

“That means sticking to your plan.

“Don’t be tempted to give up when things don’t always go your way, it’ll all be worth it in the end.”

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