How to get your finances in order for 2024
Start the new year with a fresh look at your savings and budgets

New Year's Day means New Year's resolutions – and, with disposable incomes still tight, money will be high on many people's agendas.
January is a good time to reassess your finances and boost the health of your savings, especially with interest rates at their highest for years.
Saving more
The high interest rates mixed with high inflation make it a good idea to save as our "buying power" is being "diluted by rising prices", said the BBC.
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When thinking about savings, creating targets that are "achievable and specific, not general" means people are "more likely to achieve their goals", said UK Savings Week.
Once these goals are in place, sticking to them can be difficult, but in order to stay focused, savers can use a "visual reminder" such as a dream house or car to help them remember why they are saving in the first place.
Picking a suitable savings account is half the battle, but "this is where it can get complicated", the BBC stated, particularly as there are a wide range available.
To get started, an easy-access account may be best, as while they "tend not to have the best interest rates", they allow withdrawals at any time, the broadcaster added.
Creating a better budget
While a budget can "feel constricting", keeping an eye on your spending is a "helpful tool" in reducing unnecessary costs, said CNBC.
Writing down your fixed expenses or downloading a budgeting app is likely to be the best first course of action, the website added, helping people to see what they have left over for "flexible expenses".
If creating a budget for the first time feels "intimidating", you might want to follow a strategy, said The Wall Street Journal's Kevin J. Ryan.
One such method is the 50/30/20 rule, a "tried and true" formula that allows 50% of post-tax income for needs, 30% for wants and 20% for savings. The "simplicity" of this approach is good for "creating flexibility", said Ryan.
The 70/20/10 method uses a similar approach, or the pay yourself first method, to direct "a percentage of your income towards a savings account" before expenses, he added.
Improving credit score
A good credit score is "essential" to be able to access the best borrowing rates, said The Times Money Mentor, but this involves hard work as it "doesn't happen overnight".
New Year is a good time to check your score, as a bad one can impact everything from a phone contract to securing a mortgage.
Some tricks to improve your score are quicker than others, but their impact might vary. For example, signing up to the electoral register means it is "easier for lenders to verify your information", helping speed up the process of applying for credit, the news website added.
But most important in improving your credit score is the need to "instil some good financial habits" until the number is "near-perfect", The Times Money Mentor continued.
One way to do so is by using a credit card "little and often", the news website said, as this avoids someone having no credit at all, something which "gives lenders a blank slate" and is not considered favourably.
Reducing debt
Getting rid of debt can be "overwhelming", said NerdWallet, and this is amplified by the fact there are several options to take. The best way is likely to depend on "how much you owe compared with your income".
There are two main do-it-yourself methods worth considering for those determined to clear debts in 2024.
Paying off the smallest debt first is an approach known as the debt snowball. It's the "best and fastest" option, said Ramsey Solutions' Jade Warshaw, as getting rid of debt is "all about momentum".
Or there is the debt avalanche. It means using money to pay off the bill with the highest interest rate. This method "will save you the most in interest payments", said Investopedia.
Experts suggest clearing debts before starting to save. This is because debts "usually cost more than savings earn", said Money Saving Expert founder Martin Lewis.
Planning for the future
It is never too soon to be planning ahead for your pension. Tools such as the MoneyHelper pension calculator can help with estimating finances needed in later life.
The state pension is available for those who have made enough National Insurance contributions throughout their lifetime, typically 30 years, but a private pension will help to top this up.
People are "bad at talking about death", said This is Money, but "planning what will happen to your money and assets after you are gone is also a New Year goal for some".
You can do it the cheaper "DIY way" or use a solicitor, said the site, but it is worth acting soon before your New Year's resolutions fade.
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Rebekah Evans joined The Week as newsletter editor in 2023 and has written on subjects ranging from Ukraine and Afghanistan to fast fashion and "brotox". She started her career at Reach plc, where she cut her teeth on news, before pivoting into personal finance at the height of the pandemic and cost-of-living crisis. Social affairs is another of her passions, and she has interviewed people from across the world and from all walks of life. Rebekah completed an NCTJ with the Press Association and has written for publications including The Guardian, The Week magazine, the Press Association and local newspapers.
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