5 Financial Changes you need to make this Year

Everybody wants to be happier, richer and more organised in 2017, and as this year is going by so quickly as we are now almost half way through January. Implementing these things into your daily lifestyle will mean a better, more comfortable and secure 2017.

Make a budget

You cant plan anything financially without knowing how much money you have left after bills and essentials each month, and you can't know that until you draw up a budget. A simple list of what comes in and goes out will show you how much you have to play with and can have a huge impact on how in control of your finances you are coming into 2017.

Be realistic about your income and how much you need to spend each month an then set yourself a budget so you know how much you have to spend. It is also worth thinking about whether you have any spare money that you could save, even £10 each month would contribute towards your summer holiday or those unexpected costs meaning you will be in a much stronger financial position for 2017.

Have an emergency fund

It's all very well saving for a specific purpose like a holiday but what everyone needs is an emergency fund held in an easy access account. You need to know that you have some funds ready if the boiler packs in or an unexpectedly high bill hits the doormat, or you risk falling into unplanned debt.

Research shows that 13 million people in the UK lack in savings to meet their essential bills for just one month if their income dropped by a quarter, with low-and middle-income households the hardest hit. It has estimated that half a million households could be protected from problem debt if they had £1,000 saved.

Pay down debt

If you have outstanding debt racked up using credit cards, personal loans, store cards and overdrafts then you are paying far higher interest than you are earning on any savings. It's essential to have some emergency savings, but after that it usually makes sense to clear pricey debt rather than save into a low-interest account.

Of course, if there is very little left each month after essential living costs and standard repayments have been made, it may be hard to find additional cash to make debt overpayments. You need to get rid of the debt that's expensive quicker; the thing sucking the life out of you is the short-term, high-interest debt.

Save into a pension

Whatever your age, saving into a pension makes good financial sense. Since 2012, new auto enrolment rules mean that more than seven million workers have been signed up to their companies' pension schemes, where both employee and employers contribute into the retirement savings. Few people have chosen to opt out, but the number of self-employed workers operating within the gig economy has grown, meaning they do not benefit from auto-enrolment, although the Government is looking at whether this can be changed.

By starting to save as early as you can, you cam make up for having less to pay in, and ease the financial pressure on yourself later on. As a rule of thumb, you should aim to save at least a tenth of your monthly salary into your pension; any contributions from your employer will make this easier to do. Assuming you save for 40 years, this should put you on course for a pension pot that's around 10 times the size of your average working-life salary. Any less than that and you will struggle.

Dedicate an hour a week

Those four tips will increase your financial security both in 2017 and the future. However, there's another vital step that could save you money forever. Setting aside an hour a week to dedicate to your finances will mean that you have a much better chance of staying abreast of your money and maintaining the good habits you have formed.

With a dedicated "money hour" once a week - or even just once a month - you would have dedicated time to compare household bills and switch, check your income streams, move cash into savings accounts and generally manage your money more effectively.

When you factor in current accounts, credit cards, home insurance and all the money minutiae, it's easy to see that setting aside time to deal properly with your finances each month will pay dividends in 2017 and beyond.

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