New year, new you: Rethinking finances in 2022

by Madaline Dunn

2022 is finally here, and after what has been a difficult financial time for many, you may be looking for ways that you can improve your finances, especially following the splurge of the festive season.

Thousands of people make New Year’s resolutions each year, with finances often being a key focus. However, at the same time, many who make financial New Year’s resolutions find them hard to stick to. Often this is because the resolutions people make are inflexible, extreme and ill-thought-out.

At The Salary Calculator, we’ll walk you through some top tips that can send you on your way to a more secure and safe financial future and outline some resolutions that are easier to stick to. In this article, we’ll explore:

  • Ways to build your credit
  • How to build up an emergency fund
  • How remortgaging can be helpful
  • How to tackle debt
  • How to become more financially literate
  • How to set your sights on a new job

How to build your credit

When it comes to building credit, it may not be something you thought about until you decide you want to finance a car or perhaps buy a house. The credit system essentially gives lenders information about you and your finances, and if your credit score isn’t great, this could affect your ability to, for example, buy your dream house, or may mean you’re faced with pretty rubbish interest rates.

You can start building your credit in simple ways, such as getting a credit card. After making this decision, ensuring you pay it off in full each month will help to boost your credit score. Likewise, it’s also important to use only a small percentage of your credit limit, say up to 25%, to keep your score high. The same goes for if you have an overdraft; staying far below the limit and paying it off shows your responsibility when it comes to finances.

Keeping an eye on your household bills and setting up a direct debit is also a good way to make sure your credit score doesn’t dip into the red.

Building up an emergency fund

The last two years have certainly taken a toll on many people’s finances, and in the New Year, many may be looking to prepare and safeguard against future turmoil. Each month, if you can afford it, it can be a good idea to put away a percentage of your income for a rainy day.

According to WalletHub, working towards building up an emergency fund “should be one of the first orders of business for any financial makeover.”

The best way to start is by setting out clear goals and working out what you can realistically save. This amount will vary depending on your financial situation and type of occupation.

That said, once you’ve settled on a figure you feel comfortable with, it’s important to put this money aside in an account that enables instant access, so when you need your emergency fund the most, you’re not faced with lots of red tape and barriers. When choosing your account, it’s best to take a look at what’s out there on the market, and compare and contrast. There are a number of comparison websites that can help you out here, including Compare the Market, Money Supermarket, and GoCompare.

Remortgaging in the New Year

Remortgaging in the New Year can be a great way to save money. If, for example, your deal is coming to its end, your home’s value has increased, or you want a better rate, this could be a good move for you.

According to Norton Finance, the average household can save £400 each year through remortgaging. That said, it’s important to take into consideration whether remortgaging is the right decision for you. If, for example, your financial situation has recently changed, or perhaps you’ve experienced credit issues, or if you’re already on a good rate, this may not be the move for you.

Tackling your debt

Confronting one’s debt can feel daunting, and often it can feel easier to bury your head in the sand. However, the New Year is a great opportunity to set out a plan to face your debt head-on.

Starting to pay off your credit card debt is a great step towards better financial health, and of course, becoming debt-free can be incredibly liberating. This can be done in small chunks to make it manageable.

Elsewhere, when paying off your debt, make sure to prioritise what needs to be paid off first. Consolidating your debt can be helpful here, too, if you have different loans and credit card balances. If you’re unsure about how to go about this, speaking to financial experts can be a great way of accessing guidance.

Become more financially literate

Becoming more financially literate can make a world of difference to your life. Research shows that, in fact, few people are financially literate (just one in three in the UK).

Better financial literacy can help you to set better financial goals, invest your money more wisely, and save more efficiently. Whether it’s checking out the latest finance podcast, hitting the books or using financial management tools, accessing this kind of knowledge can place more control in your hands, help you avoid debt, and keep an eye out for risky investments and fraud.

There are some great podcasts out there that can help you on your way to becoming more financially savvy, including BiggerPockets Money, Future Rich, and Money 101, which provide down-to-earth, accessible guidance and top tips, making finances less intimidating.

Meanwhile, if you’re looking to get your nose stuck into some books, Money: A Users Guide – Laura Whateley, Real Life Money: An Honest Guide to Taking Control of Your Finances by Clare Seal, and Manage Your Money Like a F*cking Grown-Up’ y Sam Beckbessinger, may help to give you a fresh perspective on finances.

Seeking out a better paying job

The New Year is the perfect opportunity to seek out a fresh start job-wise. You may be aware that you’ve got as far as you can in your current role, and perhaps you’re not receiving the kind of wage packet that your skills entitle to you. Say goodbye to rubbish pay in the New Year, and take on the adventure of a new job. Reports even show that January is the best time of year to lookout for a new job!

That said, when looking for a new job, it’s also important to take into consideration a few different factors. Look inwards, and ask yourself why you’re seeking a new role, what kind of skills you have to bring to a new role, and what jobs do you expect to be eligible for. It’s always great to be ambitious and strive for something new and exciting, but be sure that you’re realistic in your approach, too.

Take a look at your CV and resume, ensure they’re up-to-date and in tip-top condition. This will allow you to put your best foot forward. Branch out on Linkedin, too. Connections are never a bad thing, and networking can even help you access a contact that could lead to you landing your dream job. Of course, practice interview tips as well, especially if it’s been a while since you last did an interview! This way you’ll be able to speak confidently about your abilities, experience and accomplishments and win over your interviewer.

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Tuesday, January 11th, 2022 Economy 2 Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

Money calendar

by Admin

Today I came across something I hadn’t considered before, but I think it’s a good idea. The BBC business website has an article they describe as a “Money Calendar”, which offers month-by-month tips to help you sort out your finances during the year. Some of the tips are simple forward planning (like saving up for Christmas earlier in the year), others are suggestions which have specific relevance to the month in question (like summer activities in July).

I think there are some great tips and points to consider in this article, in some cases with links to more detailed information if you want to explore further. At a time of year when we’re all trying to get our finances sorted out, why not take a look and see if it gives you any useful pointers?

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Wednesday, January 20th, 2016 Consumer Goods No Comments

Trying to live cheaply

by Admin

I was interested to read an article on the BBC news website today about the new benefits cap, which was trying to estimate how much money someone needs to be able to live (albeit cheaply). As well as some examples of how people can save a bit of money with cheaper options, it was interesting to me to see things that I wouldn’t necessarily have considered when trying to work out my weekly spend.

For example, they say that the average family spends £9.50 a week on furniture. Now, obviously, most people don’t buy a new piece of furniture each week, and I can’t remember the last time I did – but it is expensive and you will need to budget for some such purchases over the year. You might think that if you were living on a budget you just wouldn’t buy furniture, but it does wear out and does need to be replaced, even if it is replaced with a cheaper, second-hand equivalent.

Also clothing – not something I spend money on regularly, but if you have a job interview you will need a suit – and you’ll have to save for many weeks at a couple of pounds a week to afford it. Things like socks will wear out, shirts will get damaged – if every penny counts, it will be difficult to get replacements, even if you shop in budget shops.

Anyway, check out the link above to read the article in more detail. You might spot somewhere that you could economise!

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Friday, April 26th, 2013 Consumer Goods, Economy, Jobs No Comments

Loan Tutor website launched!

by Admin

A new sister site to The Salary Calculator has been launched to provide information about loans and loan repayment.

Loan Tutor contains details about different loan types, such as mortgages, unsecured loans, debt consolidation loans and student loans. As well as a suite of tools for calculating loan repayment costs, there are also hints and tips and links to further information about borrowing money.

There will also be articles with suggestions of how you can save money with loans, including the first of these which explains how to avoid overpaying your student loan. Other articles and tools are planned for the future, including car loans, offset mortgages and credit cards.

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Tuesday, August 7th, 2012 About The Salary Calculator No Comments

Student Loan repayment threshold

by Admin

Those of you who are repaying your Student Loan through PAYE might have noticed that this month your student loan deduction is a little lower than usual (£5-£6 lower). This is because the annual threshold for student loan repayments increased in April from £15,000 to £15,795.

Income-contingent Student Loans are repaid from the April after you complete your course, at a rate of 9% on any gross income above this threshold. This is similar to the way income tax is calculated – i.e. a percentage of any income above a certain “free” allowance. However, while the tax-free allowance usually increases by a small amount each year, the student loan repayment threshold has been steady at £15,000 since April 2005 – before that, it was £10,000. If you’ve been paying off your student loan for a few years now, you may be surprised to see this change. More information is available from the Student Loan Repayment site. The Salary Calculator is up-to-date with this change to the repayment threshold.

If you are repaying your student loan and you think you might be close to paying it off, this earlier blog post about Student Loan over-repayment may be of interest to you.

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Monday, April 23rd, 2012 Student Loan No Comments

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