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How to keep those resolutions on track

new year dietHappy 2017 everyone! By now you’ll all be well into your New Year resolutions. No chocolate, no alcohol, no fun, right? But here’s a thought. Staying on track might be easier if you save the money you would’ve spent on your guilty pleasure. Watching the cash add up might just be the incentive you need to keep going. 

It’s really simple to open a regular savings account for small amounts. In most cases, you’re limited to between £25 to £300 a month, although some schemes will take just £1.

The other incentive is that regular savings now pay better interest rates at 3% to 5% than your typical cash Isa. In the past, the tax perks on the cash Isa gave it the upper hand. But the new personal savings allowance means most people won’t have to pay tax on any savings interest.

The juiciest deals (5%) are for existing current account customers at (or those prepared to switch to) HSBC, First Direct, Nationwide and M&S. They tend to last about a year and withdrawals may be limited. In contrast, Virgin has an account open to all which pays 2.25%. There’s loads more info at all the comparison sites, particularly www.moneysavingexpert.com/savings/best-regular-savings-accounts.

If you’re thinking of saving longer term, you could try shares. Admittedly, the outlook for 2017 is rocky: Trump, Brexit and so on. But we had all this trouble in 2016 too. The experts predicted a meltdown yet the FTSE-100 shares index went up 14% in the year. Nice little earner – for those who were in the market and that’s the point. Small amounts build up over time, but they have to be saved in the first place.

Of course, 2017 could see all last year’s gains reverse. Terrifying as that sounds, it might mean you end up buying at the right time – when prices are low. Actually, saving a fixed amount every month means by default you invest more when shares are cheap and less when they are expensive. That is not a bad discipline!

Hargreaves Lansdown and Fidelity have online savings plans starting at £25 and £50 a month respectively. You can stop, start, increase or decrease at any time without penalty. Or see our beginners' guide to investing here. Finally you could always shovel the cash into a pension. Then at least the government will give you back the tax you’ve already paid on it.

As for me, I’m trying not to buy any clothes this year. That includes jewellery, scarves, handbags etc. I have plenty and guess what – if I lost a stone, I could get most of my old wardrobe back! I reckon I’ll have at least £75 to put in my Vanguard UK tracker fund every month, which I suspect might do somewhat better than my diet.

My dream: life without a landline
Merry Christmas to all!
 

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Monday, 10 December 2018