How are your New Year’s financial resolutions coming along? If you’re struggling to stick to best laid plans, the fact is you’re not alone. Research shows that by February, up to 80% of people have already thrown in the towel (Forbes, 2020).

The secret to success is to set achievable New Year’s resolutions, and we can help you along the way with actionable advice. Whether you’re a family saving for a dream holiday, a couple getting ready for a new baby, or a student about to embark on a college course, we have some savvy saving tips to help you realise your financial goals.

Organise your debt

The first step to savvy saving is clearing your short-term debt.

Short-term debt examples include

• credit card debt
• bank overdrafts
• car repayments
• home improvement loans
• or that expensive couch you bought but are paying off in instalments

If you have several debts to clear, list them from highest interest rate to lowest, so you can prioritise what needs to be cleared first.

The avalanche or snowball method?

There are lots of debt management methods you can use too. Let’s talk about the avalanche and snowball methods.

What is the avalanche method?

The ‘avalanche’ method is a popular approach for managing debts where you clear the debt with the highest interest first. At a basic level, it means focusing on paying off the highest interest credit cards or loans first and making a minimum payment on lower interest debts. This approach can save you the most in interest payments in the long run.

What is the snowball method?

However, if you need the motivation of a ‘quick win’, the ‘snowball’ method might be more your style. Set a goal of paying off your smallest debt first (for example, a €300 Credit Union loan) and work your way from smallest to biggest over the year, ticking your financial burdens off one by one. It might take longer but when you see the results of your hard work, you’ll be encouraged to keep going.

How to create a personalised budget plan

An essential step to saving is personalising your budget to your lifestyle. Think about what your non-negotiable costs are and start from there. You’re much more likely to stick to your budget over time if you take time to make a financial plan that works for you.

Consider your life now and in the future

Your budget is likely to look very different depending what stage you’re at in life. The spending habits of a married couple paying a mortgage will differ considerably from a college student renting accommodation with friends!

A typical family budget includes items like electricity bills, groceries, mortgage payments, clothes, and childcare costs, while a college student’s non-negotiables could be rent, tuition fees, and college books.

The non-negotiables are the essentials: the things you need to survive. Once they’re taken care of you can start to look at the desirables.

Maybe that’s your expensive gym membership, a new mobile phone, a takeaway coffee every day, or that family trip to Lapland you’ve always dreamed about! The thing about personalised budgeting is that you can cut costs to suit your lifestyle and because your method is tailored to you, you’ll stick to it.

Set financial goals

Setting concrete financial goals for the year can motivate you to make sacrifices and help resist the urge to splurge. Depending on where you’re at in life, there are different types of financial goals.

Goals for the next 5 years might include a brand-new car, a deposit for your first home, or a rainy day emergency fund.

Maybe you and your fiancé are saving for a wedding, or you’re a student who hopes to jet off to America for the summer. Perhaps an extension to your house to accommodate a growing family is one of your goals for next year, or you could be on the road to retirement and a bucket list holiday is on the horizon.

Keep a diary of your goals and track your progress week on week. Or if visualisation is your thing, choose a picture to signify your goal and put it somewhere you can see it every day… this will help increase your resolve when the going gets tough!

Think about how you save

How do you save - do you have a savings account or does all your money sit in your current account? If you don’t have a separate savings account, opening one should be top of your ‘to-do’ list.

Maybe you save by putting whatever money you have leftover aside every month, and this method may not be working for you. Think about setting up a direct debit that will transfer a fixed amount of money into your savings account when you get paid. Putting money out of sight and out of mind means you won’t be tempted to spend it.

A notice deposit account, where you give several days or weeks’ notice before accessing the savings, may be a good idea so you are less tempted to dip into it. You can even open a separate account specifically for your goal, so every time you log on to your internet banking you can see the amount build up.

Introduce saving swaps

Another smart way to up your saving game is to do your research. Overhaul your spending habits with a few easy tweaks.

A family of two adults and two children can make huge savings by changing the supermarket they shop in, even though it may be slightly further away. Instead of getting a takeaway every weekend, change it to once a month and have fun cooking together instead, the kids will love this!

• Cut down on takeaways - cook at home
• Organise dinner parties over nights out
• Do a weekly shop instead of impulse led trips
• Change electricity/mobile phone provider
• Shop second hand and up your sustainability game
• Research quotes for car and home insurance

It might be easy to stick with the status quo, but the start of a new year is a great time to look at your overall spending and see where you can swap and make changes.

If you are a student, consider buying second-hand college books or borrow them from the library: save money and practice sustainability, it’s a win-win! Social butterflies can switch it up and have friends around for dinner where everyone brings a dish instead of splashing out on a meal.

Compare and save

When you’re short on time, sometimes the easiest option is to buy the first thing you see, but a little research online can save you hundreds over a year.

Using price comparison sites for booking flights/hotels or looking for car insurance/ home insurance/ electricity providers, let you compare options side by side so you can easily see where to make savings. Often, hotel websites or airline sites will have deals or special discounts not available on a third-party website so make sure to check these too when researching your next trip.

Coupons and loyalty schemes

Browsing discount sites is a great way to find deals on everything from restaurants to electrical goods. Don’t overlook loyalty schemes, many businesses are now using loyalty apps where you can build up reward points, instead of cards that get lost in the bottom of your bag.

With a little planning and some readjustments, small changes can make a big difference to your bank balance. If you have a financial goal in mind and want advice on turning your dream into reality, fill out the form below and book a call with one of our financial advisors.

Get a free financial review online now to take the first steps towards taking control of your finances.

Irish Life Financial Services don’t provide advice on budgeting and household expenditure. However we can advise you on your protection, retirement, savings and investments needs.