Money saving: How Britons can make a ‘big difference’ with their finances in 2021

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Saving money in 2021 will be desired by millions of people right across the UK, but it is clear taking action on the matter is key. For those who are hoping to make savings, cut costs, and become more financially efficient, there are a number of ways to proceed. However, some will be better than others in helping people to achieve the financial position they desire.

A number of organisations provided insight to Express.co.uk on how Britons will be able to secure money saving wins in 2021.

Hayley Millhouse, MD of low-cost financial advice platform OpenMoney, shared her tips for financial resolutions this new year.

Firstly, Ms Millhouse stated reviewing income and outgoings are a key task for those hoping to save money this coming year.

Creating a monthly budget for expenditure such as mortgage or rent, bills, groceries and transport costs will allow Britons to have an understanding of where their money is going.

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This will help individuals identify areas where they are potentially overspending, and subsequently cut out unnecessary costs.

Next, Ms Millhouse urged Britons to start to save towards a cash buffer – a financial cushion for if times should get tough.

She advised a fallback of three months worth of outgoings kept in accessible savings, but said even saving a small amount was better than nothing at all.

Some people may already have a cash buffer, and in this case, they should consider replenishing this, or starting afresh in 2021.

Finally, Ms Millhouse said all Britons should consider protecting themselves from financial difficulties in the form of insurance.

Income protection insurance or critical illness insurance can provide valuable support, but people should consult a financial adviser where possible to ensure they make the right decisions.

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Also providing the latest tips and tricks to Britons was Christopher Rudden, Investment Advisory Manager at Moneyfarm.

Mr Rudden gave insight into how people can make their money grow throughout the coming year, and achieve their goals.

While many start new savings habits, it is keeping these up for the whole of 2021 and beyond which is key.

He said: “Regular top ups ensure you can steadily grow your savings pot without having to make big deposits.

“It can be tempting to spend spare cash on little luxuries but, by making a greater effort to save, these small amounts could make a big difference in the long term.”

Secondly, goal setting is key, and Britons should be using the New Year period to reassess their future plans, and how they can meet their goals.

Once these are clearly set out, it is vital to make a plan of how these goals will be achieved.

Sticking to longer term plans will ensure gains are made in the future, Mr Rudden said.

As a third point, Mr Rudden said diversification is key to ensure monetary growth in 2021.

He concluded: “To ensure your money is working as hard as possible for you and to lessen the risk of your money losing value, make sure your money is spread across a range of investments, funds and geographies.

“Diversification is a crucial component of reaching long-term financial goals, while minimising risk.”

As many people continue to wind down from the Christmas season, however, there may be shorter term and well as long term goals to achieve.

Kevin Mountford, co-founder of savings platform Raisin, gave tips on how people can start saving even before the new year begins.

Unwanted presents from Christmas, he said, can be used as gifts throughout the year, and excess food from festive celebrations frozen to use later and prevent waste.

In addition, Mr Mountford urged Britons to consider wrapping up their Christmas tree and decorations to ensure they do not waste money on purchasing new items next year.

Finally, joining other money saving experts, Raisin has advised tackling finances at the top of the year.

Mr Mountford commented: “When you map out all of your finances and see all of your debt physically, start prioritising which parts you are going to tackle first – pay off the ones that are going to ultimately keep a roof over your head.

“Then, pay off all of your credit cards – the ones that you pay interest on should be paid off first. Don’t ignore debts, as this will escalate the problem.

“January is a time where most people will be in the same boat of stripping back their finances, and always seek help if you need it.”

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