Most of us associate new year resolutions with exercise. This could be an early morning run, pounding the streets in freezing cold weather, or religiously subjecting your body to fierce, gym-based workouts. I’ve noticed the usual January influx of enthusiastic new faces at our swimming club this past week while noting that, like divorce lawyers, this would appear to be a busy time of the year for bicycle retailers.
Many people make resolutions either because they want to adopt good habits or rid themselves of bad ones. A desire to lose weight, or achieve that most nebulous of ambitions, ‘get fit’, is usually preceded by a long, hard look in the mirror at our post-festive season bodies, when even breathing in has a limited effect. That lower belly wobble your hand can no longer conceal definitely did not exist at the beginning of November. Time to do something about it.
Thousands of people desperately want to stop smoking and consider the new year a great time to pack in the evil habit. They’re right, although there’s no doubt that binning the cigarette addiction at any time requires the constant application of sturdy willpower.
Regular, successful new year ‘resolutionists’ appreciate the benefits of simply feeling better by doing something different. After all, January is a miserable month: you could be back at work; the weather’s lousy; bills hit your email inbox or drop through your letterbox with disappointing frequency; and you would rather not pile any additional outgoings on your credit cards. The first part of the year is an excellent time to counter this cheerless period by learning a new language, or an instrument, or by taking up a new hobby.
One of my most effective resolutions was made more than a decade ago; it has nothing to do with physical exercise and I’ve stuck with it to the point where it’s become a habit which is, I suppose, the ultimate objective of any resolution. And, while it might sound a little ‘nerdy’, it can deliver some substantial savings, money which can then be invested.
At the start of each year, I diarise dates a month or so before a host of product or service renewals are due, including expenditure on items such as mobile phones, magazine subscriptions, premium television packages, or car and home insurance premia. These simple reminders give me time to check upon the availability of alternatives and to then ask existing suppliers if they’re prepared to match what is often a better offer available with a competitor.
The initial purge of subscriptions and direct debit payments, which took place in 2011, netted over £1,600, money that was duly invested into my pension. Each year, therefore, I check to see whether the cost of any other outgoings can be shaved or dropped altogether.
Then there’s the Penny Challenge, a means of saving that couldn’t be any easier.
You start by saving a penny on 1st January and add an extra penny every day: 2p on day two, 3p on day three and so on. As we’re still in early January, it’s easy enough to catch up: were you to start on 15th January, for instance, you would need to contribute £1.20 to your saving pot. By the time you reach 31st December 2024, when this year’s final contribution will be £3.66, assuming there has been no petty pilfering, you should end up trousering a welcome £671.61.
Some people, recognising that their enthusiasm for saving may diminish over 12 months, could start with an initial £3.66 and reduce their contribution by a penny every day; the result, of course, is exactly the same.
Alternatively, there’s the tea/coffee jar method of saving, perfect for those trying to kick an expensive caffeine habit or stop walking around town with a cardboard cup like some modern-day Kojak without realising that only Telly Savalas looked cool doing so.
How does it work? Easy. Instead of ordering your daily white mocha with toffee nut syrup and caramel, spending £4.25 for the pleasure of spilling half of it when removing the lid, simply save the money. That’s £21.25 a week; even if you enjoy six weeks’ annual leave, you’ll have saved almost £980 in the space of 12 months.
You could replace certain debts to reduce outgoings by using equity release. By releasing a tax free cash lump sum from your property (minimum is £10,000) you could help cashflow by replacing outgoings such as your credit card payments or existing mortgage. A lifetime mortgage - the most common form of equity release, provides the option of making some payments, commonly up to 10% per year or no payments at all.
Finally, there’s looking to the longer term and the benefits of the ‘triple lock’, which guarantees that the state pension rises in line with inflation, average earnings or 2.5%. However, this pensioner-friendly arrangement is likely to come under increased scrutiny as we career towards a General Election, which means there could be great merit in checking your National Insurance (NI) contributions.
The full state pension is scheduled to increase to £11,541 from April, but only for those who have made the full complement of 35 years’ NI contributions.
Ordinarily, you may make up to six years of missed contributions; however, up until 5th April 2025, you will be allowed to fill in any missed years between April 2006 and April 2016. The rewards for doing so could be significant and last for years.
Whichever saving method you adopt, be tenacious and have a great 2024.