IT’S the time of year when a lot of us take a long hard look at our finances and decide that we need to make a change.

Alongside plans to lose weight, work out and quit bad habits such as smoking, getting into shape financially is a popular resolution every new year.

This year, with the country either in or heading towards recession and with prices continuing to rise, it has never been so important to be in control of your finances and your spending.

So what resolutions should you make and how do you stick to them? Here are some ideas and I’ve included some tips on making them stick. Happy new year!

Make a budget

The single most empowering thing you can do for your finances is to understand your income and outgoings. Without that, you will never be able to save money consistently or be confident that your bills are covered, you risk financial chaos.

So take an hour, early in the year, and sit down with your bank statements. You need a column for income and a column for your regular outgoings like bills. Whatever is left is your disposable income. Ideally you want to set aside a chunk of that for savings or clearing debt.

Then, after that, divide whatever is left by the weeks in the month and that is what you have to spend. Some people even like to break it down to a daily amount.

Understanding your budget empowers you to save and changes your relationship with your bank balance. It can be hard to spend sensibly all the time but once you know how much you have to spend in a week you can’t unknow it.

That means that even if you fall off the wagon, you still know what you need to do to balance the books.

Save some money, any money

Annoying financial journalists like me regularly offer well meaning, good advice like: “Always have at least three months’ worth of salary saved as a rainy-day fund.”

It’s good advice but if you’re on a tight income and you struggle to save anything then I appreciate that it sounds out- of-touch and unachievable.

But anything you can save is better than nothing. If in 2023 you can save £1 a week then by Christmas you will have £50 as a financial buffer, which could be the difference between managing an unexpected bill or getting into debt.

Ideally, you will draw up a budget and understand how much you can afford to save each month. But if you have done that and there’s just no extra to save, then consider signing up to an autosaving app like Plum or Moneybox.

There are lots of options, so shop around, but some automatically siphon off small amounts of money from your current account into savings, while others round up your spending and move the change into a savings account. You won’t feel the pain but you will see the benefit.

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Pay down debts

This is always a popular resolution and it’s really important in the current climate – official data shows that one in four people have borrowed more compared to a year ago.

Just like with saving, understanding your budget is absolutely key to making this work. When you know how much cash you have spare each month, you know how much you can assign to clearing debt – and plan a path out of it.

Aim to clear your most expensive debt first, things like credit card debts and overdrafts are usually more expensive than personal loans. So prioritise the most expensive.

If you’ve drawn up your budget and you can see that your debts are unaffordable then don’t panic and ignore it. Otherwise, by January 2024 you’ll be in a much worse position.

Get in touch with a debt charity, ask for help planning your route out of debt and access a support network. You could look back this time next year and know this was the best thing you ever did.

Add some spending friction

There’s a phrase used by the people who build websites and apps: frictionless. If they can make purchases as easy as possible, with saved card details and easily accessible buy-now-pay-later offers, then more people spend money. It is that simple.

But you can hack that knowledge and use it the other way. If you know you’re an impulse online shopper then resolve to put more barriers in your way.

Log out from shopping apps like Amazon, and don’t save your card details on websites that tempt you into unnecessary spending. Ban yourself from shopping with a glass of wine on a Friday night, when it’s all too easy to spend more than you mean.

Friction means you spend less. Marketers know that, you should, too.

Unsubscribe from mailing lists

Another good way to cut unnecessary spending is to unsubscribe from sales emails. Getting emails from companies with offers can nudge you into buying, that’s why they do it. The great thing about this resolution is that you only need to do it once, when your willpower is high, and the benefits last all year.

So spend some time cleansing your inbox of temptation and your bank balance will thank you.

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Build a weekly money habit

Can you set aside a weekly half an hour just to manage your finances in 2023? If that’s too ambitious then even every other week would make a significant difference.

With a specific time set aside to manage your money you will be much more likely to compare your bills and move to cheaper suppliers, to revisit and review your budget, to check your savings account is the most competitive and to do all the stuff that will help you financially survive and even thrive this year.

This is a hard habit to build but it’s just like the gym. If you schedule it, block it out in your diary and commit to it then you will see real benefits, whatever this new year brings.

Felicity Hannah is a freelance financial journalist and columnist
Twitter: @FelicityHannah; https://mastodon.green/@felicityhannah