Ten ways to look after your finances in 2021

Money 2020-12-17
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With 2020 finally coming to an end and a fresh year on the horizon, there’s no better time to make financial resolutions, ditch bad money habits and consider ways to improve your financial health.

2020 was a difficult year for many, with COVID-19 disrupting nearly every aspect of daily life including our finances. Our latest research reveals that nearly a fifth (17%) haven’t been able to save during the lockdown period with 33% of women saying last year has made them think about how they save money (compared to 25% of men), and one fifth (20%) of women admitted they haven’t been able to spend money during lockdown (compared to 13% of men).

However, on a more positive note, nearly a third (29%) of Brits have said the lockdown has made them think about how to spend money more carefully and more than a fifth (22%) have said it has made them want to put more money into savings.

With this new research in mind, we have put together our top ten tips for improving your budgeting and financial habits in the New Year.

Start budgeting

Having a budget is essential. Budgeting is first and foremost understanding the money you have coming in and going out every month.

Firstly, arrange for any direct debits and regular payments to come out as soon as you get paid, this allows you to clearly see how much money you have left for the rest of the month. Remember to budget for ‘out of the ordinary’ costs, such as birthdays in any given month, to give you some extra leeway.

Use apps to help keep track

Managing your money is never easy no matter how much, or how little, you have. Luckily, we live in a society where there’s an app for everything and there are many available when it comes to making your money go further. To save you the hassle, we have rounded up our favourite money managing apps

Keep your budget separate

Once you've set your budget, keep the amount for essentials somewhere physically different, such as a separate bank account. It may look like a smaller amount left, but it will make you more conscious about what you can spend your money on.

Build an emergency fund

If this year has shown us anything, it is that you never know what is to come. One of the best ways to protect yourself from uncertainty and setbacks is having an emergency financial fund. Aim to save three to six months' worth of living expenses in an easy-to-access account for if you’re hit with a big, unplanned cost or bill.

Try a money-saving challenge

There are loads of money-saving challenges around that can help inspire and encourage you to save money by making it like a game or contest. Money-saving challenges to consider include the no-spend challenge, where you don’t spend any money for a certain amount of time or on different days of the week, and the 52-week savings challenge, where you save £1 on week one, £2 on week two and so on. By the end of the challenge, you’re saving £52 in one week.

Ditch unnecessary expenses

Each month, you may unknowingly pay for unnecessary expenses, such as pricey gym memberships you haven’t used. Take stock of your committed spending and make cuts where needed. Making extra room in your budget can help you reach other financial goals.

Always shop around

Check to see if you are overpaying for energy services and insurance. You could save hundreds of pounds every year by switching to the cheapest deals in your area. Make sure you shop around and compare prices before renewing your current deals.

Invest your money as well as spending it

What if you could make your money work harder for you? There are various ways you can invest your hard-earned cash. For short-to-medium-term savings look at Cash ISAs. If you’re thinking about saving for your future, make sure you invest in your pension earlier than you might have planned, as it can make a real difference in the long term.

Build your credit score

While it can be tempting to rely on your credit card to see you through the month, before splashing the cash, ensure you always stay below 25% of your credit limit, so if you have £1,000, spend less than £250 per month. Also try to pay off the full amount each month rather than just the minimum payments, as you will be viewed as a more trustworthy lender, which will boost your credit score moving forward.

Wait to buy with the 30-day rule

Many of us have our guilty of impulse purchases during lockdown. From gym equipment that may be gathering dust, to a banana bread baking kit, impulse purchases can be costly and, ultimately, a waste of money. Instead, next time you see something that you think is a ‘must-have’, wait 30 days and see if you still feel the same way. If you do, then buy it, but 9 times out of 10 you’ll have forgotten all about it.

Vincent Reboul, Managing Director of Hitachi Capital Consumer Finance, comments:

“2020 has been challenging for many, especially financially. With the start of the new year, it’s a great time to leave the old year behind and set new goals for the future. If your new year goals include increasing your savings and controlling your finances, we hope these tips give you the tools and confidence to work towards your financial goals in 2021.”

For more expert insight into how to get your finances in order this year, please visit:


Hitachi Hints and Tips is intended to be informative and interesting. It does not constitute financial advice, and you should always do further research when making any financial decisions. All information was correct at date of publication.


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