HELPFUL HINTS FOR FAMILY LIFE Five ways to master finance fitness in 2022

Want to flex those money muscles for a fresh start in the new year?

After a tough couple of years for many, 2022 could mean a fresh start for your finances. These expert tips could get you started.

1. Budget for 2022

The past two years have been unpredictable. Some people have saved more, while others have suffered income shocks.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, says that by setting a budget, ‘instead of crawling through each month on a wing and a prayer, you’ll have a plan you can stick to.

‘Use an online budget tool to input your spending, plus regular bills and big one-off expenses like holidays. Ideally, you want to get to the point where you free up a sum of money each month.’

2. Have a plan to pay off debts

Coles says: ‘You’ll need to keep making the minimum repayments on everything, but start by overpaying the most expensive debt first. It often makes sense to switch your debts to the cheapest possible rate while you work through them, so less of your repayments go on interest.’

3. Save for a ‘rainy day’

Rachel Springall, a finance expert at Moneyfacts.co.uk, suggests considering which type of savings account will suit your needs. ‘Regular savings accounts inspire the savings habit, easy access accounts are flexible, and fixed bonds are more suited for lump sums,’ says Springall.

4. Consider investments

Maike Currie, investment director at Fidelity International, suggests considering investments for longer term goals.

‘Create a separate investment account for these goals, such as a stocks and shares Isa, that you can add into each month. Investing in an Isa is a tax-efficient way to further boost your savings.’

5. Ditch and switch regular household bills

Go through bills, such as mobile and broadband contracts, to see what savings can me made.