5 realistic financial resolutions
4 MIN READ
It’s the time of year when we resolve to eat more healthily, get off the sofa and exercise, learn new skills and save more money.
But, although many New Year resolutions are made, few manage to struggle through the dark January days and make it to Spring.
Fewer still make it through the year to Christmas future.
So is there a way of ensuring that the changes we want to make in our lives stick?
One reason for our best laid plans going astray is they’re too ambitious.
We ask a lot of ourselves.
Making big changes quickly can be beyond many of us and lead to us dropping our resolutions.
And breaking our promises to change can make it feel like change isn’t possible.
A vicious circle.
Start small with practical steps
If you really want to give yourself a fighting chance of making changes, the experts advise breaking them down into small, realistic, achievable steps.
With that in mind, here are 5 practical, bite-sized changes you can make right away to improve your finances all year round.
1 Not saving yet? Start by saving just €1, today
In November 2018, 47% of people surveyed for the Bank of Ireland/ESRI Savings Index said they were saving regularly.
One of the reasons that over half of us don’t save is that we just don’t think we can afford to. Or, at least, we don’t think we can save a decent amount. Unfortunately, this often means we don’t get started at all.
But we can all afford to save something.
Why not start by saving €1.
Find a €1 coin, stick it in a jar or envelope and you have officially started saving.
€1 is not going to get you far, on its own, of course, but it may if you repeat it.
How often do you think you can save €1 in the next 12 months?
Once a month, once a week, once a day?
If money is really tight then you might only be able to save €1 once a week.
That means you’ll save €52 in a year. But if you are able to save €1 a day then you’ll have saved €365 at the end of the year.
Better still, automate your saving so it doesn’t get forgotten by setting up a Bank of Ireland demand deposit account, notice account or regular saving account. Terms and conditions apply to savings accounts.
The most important thing is to start saving right away and then increase your regular savings as soon as you’re able.
Save €2 a day, for example, and you’ll have saved €730 in 12 months.
2 Not got a household budget? Create one in 5 minutes
Don’t have a household budget?
Maybe what’s putting you off is the thought of being overwhelmed by gathering statements and working everything out?
We’ve a post that covers how to stop putting it off and get your finances sorted, here.
How about setting aside 5 minutes, today, to get started? Just 5 minutes.
Get hold of one recent bank statement for your main bank account and jot down how much money you have coming in each month after tax.
If it varies greatly from month to month, work out your average monthly income from at least 3 statements.
Next, write down how much your 5 biggest monthly expenses are.
They’re usually the obvious things like the mortgage or rent, heating, lighting, transport and phone bills.
Now that you’ve got your income and top 5 biggest expenses noted down somewhere safe, you’re on your way to building your budget.
Now, how many 5-minute sessions like this can you manage? One a year? One a month. One a week?
Before you finish your first session, book in your next session by setting a reminder on your phone, jotting a note in your diary or on a calendar.
Keep booking those 5-minute sessions and writing down your outgoings until you have them all.
Take a look to see where you might make savings to better match your income to your expenses.
What can you change to improve things?
3 Haven’t shopped around recently? Cut 1 bill, today
Comparison websites have made it simpler and quicker to check whether you are getting the best deal for your gas, electricity, broadband, phone etc.
Not everybody takes the time to compare prices that could lead to real savings but you can.
Find copies of your biggest annual or monthly utility bill, pop online and find out whether you could get a better deal.
Take each of your regular bills, one at a time, and compare them to the latest offers to see if you can save.
Work your way through your bills, take note of any savings you make and use them to build up your savings.
If you don’t have a rainy day fund then build it up with your savings.
4 Big credit card balance? Set a deadline to pay it off
Many people use their credit cards to manage the cost of Christmas and start the new year with larger credit card balances than they’d like.
When you get the big credit card bill – the one with all your festive spending on it – do 3 simple calculations.
Divide your outstanding balance by 3, by 6 and then by 12 to get a rough idea of what you would have to pay each month to clear your balance in 3 months, 6 months or 12 months.
You’ll also pay interest on the balance while you are paying off your bill, of course, based on your card’s APR (Annual Percentage Rate) but simply dividing by 3, 6, 12 will give you a rough idea.
Decide how much time you’re going to allow yourself to pay it off.
Be realistic but try to clear the balance as quickly as you can comfortably manage.
Bank of Ireland Mastercard credit card holders can now spread the cost of items over €500 using an instalment plan at a lower rate* of 6.9% Annual Percentage Rate variable.
The cost is paid off in 12 equal monthly instalments.
Write down the amount you plan to pay each month on a calendar or anywhere visible to you as a reminder.
Make a note of the date of the final payment you’re aiming for.
Try to stick to your repayment plan each month by paying off a percentage of the balance and avoid adding to your credit card bill wherever possible.
A cheaper way of managing the cost of Christmas is maybe for you to save for it in advance based on how much this year’s Christmas cost.
5 Not yet saving for retirement? Start, today
We all know we should be saving for retirement but it can sometimes seem both a long way off and challenging to save enough for a comfortable pension.
But the sooner you start, the more you can save. And starting small is better than not starting at all. We are all living longer and can now expect to spend up to 30 years in retirement.
You can start a pension by contributing as little as €25 a month. And the good news is that you get tax relief on pension contributions (within certain limits)
The earlier you start saving for a pension the better but even if you’ve left it a late something is better than nothing.
A pension calculator like this one on the Pensions Authority website shows you how much you’ll need to save depending on your age, the age you plan to retire and the income you want when you retire.
Increase your pension contributions as soon as you can.
Find out more
If you want to know more about Bank of Ireland’s credit card instalment plan, please click here.
*Refers to Bank of Ireland’s lowest standard personal loan rate under €20,000 and overdraft rate as of 29 May 2018.
Maximum of two purchases on an Instalment Plan at any one time. The total of all purchases you put onto Instalment Plan option can be up to a total of 80% of the credit limit on your card.
APR variable rate
Total cost of credit
Monthly instalment amount