At Thistle Credit Union, we’re passionate about empowering our members to build a habit of regular saving and making sensible financial decisions with the aim of ending the cycle of borrowing and improving their financial resilience; something that has become more important than ever with the rise of the cost of living. A survey conducted by Lloyds Banking Group in 2021 found that around 23% of UK adults worry about their finances at least once a week and with Christmas just over and January fast approaching, there is no better time to set news years resolutions and start building better money habits.
There are so many ways we can improve our relationship with money that if we included all of them, we would be here all day. So instead, we’ve reduced it down to our top five easy recommendations to get you started this January.
Tip 1 – Create a Budget and Stick to it
Creating a weekly or monthly budget that tracks your income and outgoings can help you assess your current financial circumstances, identify your spending habits and gain a better understanding of the resources you have to work with. Although it may seem overwhelming at first, taking the time to go through your bank statements can help you identify areas where you can reduce unnecessary spending.
Having a budget, and following it, helps to provide structure, reduce impulse spending and limit the possibility of having to enter your overdraft. If you have something specific you’re saving for, this is the perfect way to help keep you on track to achieving your goals.
Tip 2 – Prioritise Paying Off Debt and Overpay Where Possible
Once you have paid your essential direct debits such as your rent, mortgage and utility bills, it’s important to prioritise paying off any outstanding debts. This will not only reduce the chances of your creditors taking additional action but it will also help you improve your credit score, reduce stress and help get you out the cycle of debt.
Being in debt can be an overwhelming experience and we understand that having multiple payments leaving your bank account throughout the month can make it difficult to manage.
Our debt consolidation loans are specifically designed for those who are repaying a significant amount of debt but are struggling to manage the multiple payment leaving their account each month.
If you were to take out this loan, Thistle Credit Union would pay your creditors directly and you would then be required to repay this amount back to the credit union with a small level of interest.
By spreading repayments over 5 years, our debt consolidation loans help you get your finances back on track while rebuilding your credit score. Click here for more information about how a debt consolidation loan can help you.
Tip 3 – Save Before You Spend
There are so many benefits of having a savings pot. From helping cover emergency expenses to celebrating life’s big moments; a secure savings pot can help to reduce financial stress and allow you to focus on what matters most in your life.
Setting up a direct debit to come off your current account the day after you get paid is a an easy and hassle free way to build up a savings pot. It doesn’t have to be a significant amount every month; simply what you can afford. This helps reduce the chances of the money being spent unnecessarily. Remember; out of sight out of mind.
An instant access account from Thistle Credit Union is available to anyone over the age of eighteen who lives, works, studies or volunteers in The West of Scotland and can help you save up to £15,000 with the added reassurance that your hard earned money is protected by The Financial Services Compensation Scheme (FSCS), meaning if anything was to happen to your credit union, you will receive the full value of your savings within seven working days. Click here for more information about our savings accounts.
Tip 4 – Remove Opportunities for Impulse Purchases
With the rise of social media, influencers and online shopping, impulse purchases can be a significant factor in people spending more than they can afford and with 28% of Brits regretting impulse purchases from social media (Moneyzine, 2023), these purchases often prove to be a waste of your hard earned money.
Studies have shown that we are more likely to make impulse purchases when we are shopping online (Moneyzine, 2023) and with platforms like Amazon and TikTok Shop making it easier than ever, this is something to be vigilant of when trying to build better money habits as more often than not, these impulse purchases end up in landfill. According to Moneyzine (2023), UK buyers produced more than 44 billion kilograms of carbon on homeware items that ended up in landfill in 2023, having a substantial negative impact on the environment.
Easy ways to reduce impulse spending include unsubscribing from all marketing emails and unfollowing brands and influencers who promote overspending and impulse shopping. Other strategies involve adding non-essential items to a list, taking some time to “cool down” and checking back in a few weeks to see if the desire to purchase is still there.
Remember, when tempted to make an impulse purchase ask yourself, do I need this? Will I use this and can I go without this?
Tip 5 – Start Carrying Cash Again
As silly as it sounds, carrying cash and having to physically hand over money has been proven to help curb our spending habits (Volumatic, 2023). Carrying physical cash can help you stick to your budget, reduce overspending and impulse purchases by making you more aware of your spending habits because you’re able to see how much you’ve spent and more importantly, how much you have left.
This has helped to make carrying cash a go-to budgeting method across all age groups, especially among the younger generations.
Conclusion
It’s important to remember that habits are not made overnight, don’t be too hard on yourself if you slip up. There is no on-size-fits-all when it comes to personal finance and by its’ very nature managing your money will be different for everyone depending on your income, outgoings and life circumstances. We can however, take steps to build better habits that help improve our relationship with money and reduce the impact of unexpected events that may cause financial hardship.
Why Choose Thistle Credit Union?
Thistle Credit Union was founded under the name Blantyre Credit Union in November 1991 and has been proudly providing affordable loans and ethical savings ever since. We’ve grown rapidly over the last 30 years and are now trusted by over 14,000 members across the West of Scotland; including Rutherglen, Hamilton, Larkhall, Ayrshire and Kilmarnock.
Thistle Credit Union offers a genuine alternative to traditional banks through our ethical savings accounts, affordable low interest loans and not for profit approach. Contact our friendly team or follow us on our social media platform for more information about how Thistle Credit Union can help you thrive in the new year.