Saving in 2021: a guide to setting your new year's resolution

by Leeds Building Society

It might feel like 2020 has lasted forever, but we’ve finally got to December and the year’s almost over. The festivities are sure to look very different this year, but there’s one tradition many people will be holding onto: new year’s resolutions.

For some, the pandemic has completely changed their spending and savings habits – making 2021 the perfect year to set a money-related resolution.

Now we’re no experts on new year’s resolutions, but we do know a thing or two about saving money. So with this in mind, we’ve put together a six-step guide to setting a resolution you can actually stick to. That way, you can kick-start a year of good savings habits.

1. Find your 'why'

The first step to sticking to your resolution is wanting to stick to it. So before you even choose your resolution, define your reason for setting it in the first place.

Do you want to save for something big, like a new car – or a special treat, such as a weekend away? Would you like to feel more financially secure by building a safety net? Do you want to reduce your spending on impulse buys? Are you aiming for a major life change, like retiring or starting your own business?

Whatever reason you land on, keep it in mind during the following steps. It could help you focus on what’s important and stay motivated throughout the year.

2. Know your money

Gather your bank statements and take an honest look at how much you have and how much you’re currently spending. This will help you to be realistic about your resolution. For example, you won’t be able to save £300 a month if you only have £200 left in your account after bills and necessities.

Looking at your statements can feel like a big first step if you’re not used to it. But it’s important to face your finances head on, and it’ll give you a much clearer picture of what’s going on. And even if you find you’ve got little to spare at the end of the month, that doesn’t mean you can’t set a money resolution.


3. Start small

Stay focussed by setting one manageable resolution. Otherwise, you could end up overstretching yourself or lacking motivation to hit every single target you’ve set.

There’s no one-size-fits-all savings goal, so it’s important to choose one that’s realistic for you. Once you’ve had a thorough look through your statements, you might decide to save a certain amount per month. Or to give up your weekly takeout coffees, or that online subscription you haven’t used for a while. Our savings calculator could help you make a decision.

Even if you don’t have any extra cash to set aside, or luxuries to give up, try thinking outside the box. Your resolution could be to regularly compare utilities providers to make sure you’re getting the best deal possible. Or to save money by repairing your old clothes rather than replacing them. There’s no savings goal too small, and something is better than nothing.

4. Decide how it'll work

Now it’s time to get into the nitty gritty and set your rules. Here are a few things to think about when you’re deciding how it’s all going to work…

  • If you’re saving a certain amount per month, will you open a savings account to keep it separate? How about setting up a Direct Debit to automate your savings? Will you be saving this amount all year, or for a set period of time?
  • If you’re giving something up, how will you make sure that you don’t just spend this money on something else? Will you give yourself any leeway, like treating yourself to a takeaway once a month instead of giving them up entirely?
  • If your goal is something like comparing utilities providers, when will you do this? How often? What will you do with the money you save?

Setting your rules will give you a crystal clear idea of what you’re expecting from yourself – and it’ll make it harder for you to sneak ‘loopholes’ into your own resolution later down the line!

5. Plan to stay motivated

Don’t feel guilty – it’s natural for your enthusiasm to wear off as the year goes on. That’s why it’s important to plan for this early on.

The ‘why’ you defined in step one should help with this. For example, if you’re saving up for a car, you could try printing out a picture to stick up somewhere, or even setting it as your phone background. It can be your daily reminder of why you should stick to your resolution.

Or you could plan to reward yourself for reaching a target amount – a box of chocolates or a bottle of wine often does the trick!

It might help to keep a regular eye on how much you’ve saved so far. Set a reminder on your phone to check your balance every month, or every three months, so that you can regularly see and celebrate what you’ve achieved.

6. Share your goals

Make yourself accountable by telling your partner, friend or family member about your resolution. If you bring them along on the journey, then they’ll be there to encourage you if the going gets tough.

Or tell us! Drop us a comment on Facebook, Twitter or Instagram – we’d love to hear what you’re saving for and why.

 

This article is intended for information purposes only and is accurate at the time of publication. It’s always advisable to verify any information you take before relying on it.