Making new year’s resolutions used to be a thing in my household. Every year it was something along the lines of: getting fit, saving money, being more Zen. Then we had the green juice fast of 2014. We had watched a documentary called Fat, Sick and Nearly Dead with Joe Cross, which not only promised a healthier body but a healthier mind too. Sold on the idea, we went out and spent a small fortune on organically grown vegetables that had been pruned by the ever so gentle hands of a qualified horticulturist. Two days in — after we had been allowed to consume only celery, broccoli and spinach juice — my husband leapt up from the sofa like a wounded animal with a “sod this” roar, ripping the first takeaway menu off the noticeboard and then proceeded to order a feast dripping in every possible E number imaginable.
So that was it. No more new year’s resolutions chez Noble. I’m not saying resolutions are completely pointless, but as with anything in life, I believe gradual consistent changes are what make a real difference. So rather than short-term promises made with a hangover, here are my five money mantras to live by:
1. Know your finances. If you have no idea what you earn and what you spend, you’re in trouble. It doesn’t matter whether your income is £1,000 or £10,000 a month, you need to make sure what is coming in is always more than what’s going out. Budgeting is hardly anyone’s idea of fun, but spending a couple of hours drilling into your personal balance sheet is time well spent.
2. Always, always check how much you are being charged. Great that your funds are doing well, but if you’re charged an annual management fee of more than 1 per cent you are probably being fleeced. Likewise, on mortgages. Don’t just look at the rate, always factor in the fee too, especially if you go for a short-term deal. Say a two-year fix has a £2,000 fee — that’s adding £83 a month to your mortgage.
3. Don’t worry if the market has dipped and you’ve now lost thousands of pounds off your portfolio. Unless you need to withdraw your money right here, right now, you haven’t lost anything at all. This is because you only make a loss if you crystallise it. Sit tight, bide your time and it is likely to be a completely different scenario in a year or so.
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4. Plan for the unexpected. Life, as we know, happens. There are exciting, happy times, like the arrival of a new baby, a new house or a promotion. But there are also the sad times — bereavement, divorce or redundancy. Whatever you do, spend some time planning for this. Whether that is making sure you have the right protection in place or savings put aside, it will help during those more difficult times.
5. Lastly, consistency always wins the race. Going to extremes never works. Sure, if you think you can live on a no-spend budget to maximise your savings in the shortest amount of time possible, go for it. But from experience, this rarely succeeds. Instead, putting aside an amount each month that is comfortable for you will make it easier to stick to. And it will soon build up.
Dealing with money shouldn’t be a January thing. It should be part of your everyday life, just like trying to eat your five a day or brushing your teeth.
And a final tip: whatever you do, don’t attempt a juice fast — it’s expensive, disgusting and will leave a bitter taste in your mouth.
