Building Financial Resilience in 2021

5 ways to get your year off to a great start

As humans, we are capable of huge resilience - both as individuals, and as communities. As things change within our personal lives and beyond, we are able to adapt and thrive, but it never hurts to have a financial safety net, so we’ve pulled together some tips for how you can apply that resilience to your money, and improve your finances in 2021:   

Create a realistic budget   

Your budget is the bedrock of your personal or household finances, so it’s a really good idea to create one that works for you, and make sure that you update it frequently. A lot of people see a budget as something that restricts them or tells them ‘no’, but it’s a good idea to change the way you look at budgeting if you want to achieve better financial resilience. All your budget really is, is knowing how much money is coming in, how much money is being paid out, and then deciding what to do with what’s left over. It gives you a feeling of control, and the power to make positive money decisions, rather than leaving your bank account to do its own thing. It doesn’t mean giving up treats - it just gives you the confidence to know that you can afford them.  

Start small with saving  

It’s really common to promise yourself that you’ll start saving ‘when you can afford to’, but often, if we don’t prioritise saving, when we earn more money, we simply upgrade our lifestyle rather than putting some of that cash away. Having a pot of savings is key to improving your finances, so it’s a good idea to work out how much you can afford to save each month, then transfer that amount to a savings account as soon as you get paid, rather than waiting to see what’s left over at the end of the month. It doesn’t matter if it’s a small amount - those deposits really add up over time. You can take a look at some of our saving options here.   

Build better spending habits 

It’s very hard to improve your finances or live with a budget if your spending habits have a mind of their own. Creating better habits could not only improve your ability to manage your finances, but it might also help you to feel more confident with money, too. If you find online shopping tempting, setting a rule that you’ll wait 24 hours before buying something can help you to make more mindful decisions. You might also consider whether items you need could be bought second-hand - saving you money and also contributing to a circular economy that’s better for the environment. This could be things from baby clothes and toys to fashion choices for yourself and household items. 

Use comparison and cashback sites

There are lots of life essentials that it’s impossible to cut out completely, like utilities, insurance and, especially during these times, entertainment. With these everyday living expenses, it’s good to make sure that you’re getting the best deal possible, and making savings where you can. Using price comparison sites like Money Supermarket every time your contract with an insurer or supplier is about to expire could save you hundreds of pounds per year, while using a cashback site like Quidco for big purchases can mean that you get a percentage of your money back. A really great idea here, is to calculate your monthly savings from switching, and put that money straight into your savings account, along with any cashback that you might have earned, to boost your financial safety net in a very simple way. 

Track your progress 

Building financial resilience and being consistently mindful of your money will soon become a habit, but in the short-term it can feel difficult, or like a chore. A great way to combat this is to track your progress using a spreadsheet or chart, because when we can see that we’re making a difference, it’s easier to stay motivated. You could start by taking a 10 x 10 grid and dividing your goal into small steps, colouring in a square every time you achieve 1% of your goal. Remember that the time it takes to improve your finances will pass anyway, whether you’re taking action or not.  

We’re all hopeful for a better 2021 in so many ways, why not make building financial resilience and being more mindful with money one of the ways that you look after yourself this year?

Discover how Bristol Credit Union can help you to achieve your financial goals, and be more confident with your money with more of our saving tips:

4 ways to start saving money

Savings habits: the good, the bad and the ugly

How to be a better saver

 

Published by
Team BCU
Posted on
18 January 2021