Six steps to sort out your finances in the New Year – and it could save you £13,500 | The Sun

JANUARY is the perfect time to kick-start healthy habits for the year ahead – but it's also prime time to get your finances in shape.

If you're planning your New Year's resolution, there are some tips you can follow to sort out your finances and pocket up to £13,495.72 by the end of the year.

Energy bills are set to rocket £3,000 from April when a new price cap comes into force.

But the guarantee only limits the amount that firms can charge customers for each unit of energy.

So if you use more energy than the average household – expect to pay more than £3,000 a year.

Under the Energy Price Guarantee, a typical household that pays their bill by direct debit will pay no more than £2,500 a year.

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The cost of supermarket staples is also rising, and retailers have already warned of price hikes over the coming months.

That means making the most of your money is more important than ever.

Whether it's moving your money to a better bank account or making the most of cashback and loyalty schemes, every penny in your pocket counts.

Here are six tips that should help you get on track.

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Check your bank statement – save £1,000

Looking over your spending might be painful as it's likely you spent more over the festive period than you would in a typical month.

But taking the time to go through your outgoings can help you work out areas you can save.

Look through your bank statement to see where your money is going, and consider whether you really need all of those services and direct debits.

For example, this could be £95 a year for Amazon Prime, £132 for Netflix, £300 for Sky, £7.99-a month for a Deliveroo pass, and £300 a year for gym membership.

Add on £7.99 for a Tesco delivery slot pass, and £10-a-month for unnecessary insurance policies such as gadget protection that is likely already included in your home insurance anyway.

That all adds up to £967 – and might not include other direct debits such as old magazine subscriptions or cinema passes.

Switch, switch, switch – £1,000

If you've been with the same provider for a while or your introductory offer has run out, the chances are you're paying too much.

This goes for everything from your mobile phone and broadband, to your home and car insurance.

Use comparison sites such as GoCompare and Confused.com to shop around for the best deals.

It's best to set a reminder or note in your diary for one month before your deal is over to give yourself time to scout the best deal.

Cashback sites such as Quidco and Topcashback can also get your money back on your purchases.

One Virgin Media customer recently revealed how they saved £264 off their bill just by asking.

If you save £22 a month on your TV and broadband like this savvy switcher, add in the average £300 a year saved by cashback website users, and the typical £253 saved by shopping around for car insurance, this adds up to a sweet saving.

Switching bank account could bag you an extra £200, bringing your total to almost £1,000.

Check you're not missing out on benefits – £3,183.72

If your circumstances have changed, for example, you've lost your job, you may now be eligible for Universal Credit.

How much you'll get depends on your circumstances, but the minimum standard allowance is £265.31 a month.

This applies to single individuals under 25, and amounts to a minimum of £3,183.72 a year.

Benefits and Universal Credit payments will rise in line with September's inflation rate of 10.1% next April.

You may also be entitled to other benefits like child benefit or marriage tax allowance.

Use calculators such as Turn2Us or Citizens Advice to check.

Pay back your debt – up to £6,000

It will likely be difficult to pay back debts before January 1 – but if you have the money then make this a priority.

If you don't then at least make a realistic plan for how you are going to get back on track.

If you're paying off an expensive credit card with a high interest rate, this is going to take you a lot longer to pay off your debts – and it could cost you thousands of pounds extra too.

You may want to think about consolidating your debts and using a 0% balance transfer credit card or a personal loan to pay them off.

Make sure you work out how much it would cost to pay back in total once you've factored in the interest rate and fees.

Use an eligibility checker such as this one from MoneySavingExpert, which helps predict if you will get accepted for credit and doesn't leave a mark on your credit score.

Once you've got a plan of action you will start to feel a lot better about your financial situation as you are taking control.

One savvy saver was able to clear £6,000 of debt using the penny savings challenge.

Set yourself a budget – up to £2,000

What do you want to achieve in 2021 with your finances? Now is a really good time to set yourself a goal.

Whether it's getting on the path to buying a house, paying off your debts or going on holiday, it will really help motivate you if you have something you're aiming for.

Try and check in on your goal every month. Perhaps you could set a reminder in your diary to reassess where you are at.

Mum of four Jade Edmondson managed to tuck £500 away in just three months with a simple budgeting trick that's "transformed" the way she manages her finances.

If you did this all year round, you could save a whopping £2,000.

Make coffee at home – save £312

Quick coffees when you are out can soon add up and a couple a week can cost you around £300 a year.

Costa Coffee was recently slammed for putting its prices up for the second time this year alone.

And The Sun revealed that Starbucks has hiked prices by as much as 33%.

You could try taking a bottle of water out with you, or making coffee in a mug with a lid or a flask and taking it with you.

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Of course, you should still treat yourself occasionally – but buying one £3 a coffee a week instead of three, would save you £312 a year.

Meanwhile, a budgeting expert has revealed the seven easy switches that could save you thousands of pounds a year.

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