New year, new money resolutions: What’s in and out for 2024
What are the personal finance trends we’re ditching in 2023? And what are we taking forward for 2024?
For some people the start of a new year means making some resolutions, as well as reflecting on the previous year. It’s also a good opportunity to take stock of your finances and think about any goals you want to achieve.
In the spirit of the new year, we’re hopping on the trend of “What’s In and What’s Out” by compiling a list of personal finances dos and don’ts we’ll be following this year. Read on as we share what we’re keeping and what we’ll be dropping for 2024.
What’s in: Automating your savings and payments
In 2024, it’s all about being more organised and keeping on top of your finances. However, paying different bills every month and keeping track of multiple accounts can be time-consuming. And as well as spending time to regularly sit down and manage your money, we also advocate for making things as easy and stress-free as possible.
Setting up standing orders or direct debits where possible helps to remove some of that unnecessary hassle. For example, set up a standing order to automatically transfer some of your income into a savings or investments account the day after payday. By following this ‘pay yourself first’ budgeting method, you’ll be putting money away into savings before you’re tempted to spend it – which is a very effective way of regularly saving money.
If all your savings and necessary outgoings happen like clockwork every month, you can rest assured that you’ll never miss an important payment. Even better, you’ll have a clearer idea of where and when your money is going – and what you have left over until your next payday.
What’s out: Cash stuffing
A trend that swept TikTok in 2023, cash stuffing is a budgeting method that involves physically portioning out cash into different areas of spend – usually by dividing bank notes into different envelopes. By keeping your spending restricted to the cash you have in each envelope, you won’t be tempted to overspend, and you’ll have a better idea of where your money is going every month.
While the principle itself is a good gateway to learning about budgeting, its utility is fairly limited in the long run. That’s because most of our spending is cash-free these days, and it’s harder to track your outgoings without any digital records or bank statements to refer to. Not to mention, physical cash is easier to steal or lose, and you’ll be missing out on earning interest from a bank account.
Instead, we’d recommend digital versions of cash stuffing. Plenty of budgeting programs or banking apps offer features that let you assign your money to different categories and set spending limits. Plus, it lets you account for spending that isn’t done in cash, like bills or online shopping.
What’s in: Investing in yourself
New Year’s resolutions are usually focused on self-improvement and development. Indeed, chances are you’ve set some personal goals to better yourself in some way, whether that’s learning a new skill or making (and sticking to) positive habits.
Although some things, like exercise classes and private counselling, cost money, “investing in yourself” doesn’t necessarily have to involve a high outlay. In many cases, it means dedicating some time and effort to focus on yourself in a caring and productive way.
Making room in both your budget and life for self-improvement is something to be prioritised this year. It’ll do wonders for your general wellbeing, and you’ll likely feel these improvements in other aspects of your life.
However, don’t use the above as justification to buy 300 skeins of yarn just because you’ve developed a sudden inclination to crochet!
What’s out: Impulsive spending
Saving money, practising mindfulness, and reducing your screen time: three things often found on people’s New Year’s resolutions lists. And the common hurdle to all these goals is impulse spending.
This year, it’s time to ditch online window shopping and mindless scrolling. Whether that’s unsubscribing from marketing emails or unfollowing social media accounts that trigger your urge to buy, find ways to remove that temptation from your day-to-day life.
And if you’re looking to reduce the time you spend on your phone, our guide to cutting your screen time can help.
What’s in: Making the most of your money
There are ways to make your existing money work harder. By being a savvy consumer and doing some research into the different types of bank accounts and financial products available, you can make the money you already have go further, all without lifting a finger. Well, metaphorically – you’ll need to do some typing at your keyboard at the very least.
Although it’s easy to stick with the same account you’ve been using for years, it’s unlikely to be the most efficient place to hoard your hard-earned money. By diversifying your accounts, you’ll have more opportunities to take advantage of higher interest rates, one-off signing-up bonuses and generous cashback rewards.
All you need to do is shop around to see what suits you best. Here are a few ways you can make the most of your money:
Switching current accounts – When it comes to bank accounts, it rarely pays to be loyal. By switching current accounts, you can often earn a one-off switching bonus, as well as take advantage of higher interest rates
Savings accounts – Rather than putting all your money into a current account with little to no interest, find a savings accounts that offers better interest on your bank balance
Credit cards – Some credit cards offer attractive rewards or frequent flyer points, which you typically wouldn’t get with a normal debit card. Plus, using a credit card responsibly can help build your credit score, which increases your chances of getting approved for a mortgage
Cashback – Make money back on your regular purchases by signing up to a cashback scheme. Several credit cards and debit cards offer cashback, or you could join a free cashback program like Quidco
With MoneySuperMarket, you can compare financial products and start looking into what’s out there.
What’s out: Side-hustles
Well, according to updated HMRC rules anyway. If you use digital platforms to sell goods or services, you may be facing increased scrutiny from the taxman.
From 1st January 2024, companies including eBay, Vinted and Airbnb will be obliged to keep and share details of transactions with HMRC. So, if the money earned from your online side hustle meets the tax threshold, you may now be liable to declare that extra income and pay tax on it.
Sellers will have a £1,000 tax-free allowance for ‘trading’ income – that’s money earned from selling new or second-hand items online, or if you offer services like tutoring or proofreading.
If you’re a casual seller who’s just decluttering for some extra cash, these new rules are unlikely to affect you. However, if you’re using an online platform to make a steady stream of income, you’ll need to brush up on these guidelines.