Financial resolution tips for saving, debt and bills

New Year fireworks
Image caption After the celebrations, many people will take a look at their finances at the start of the year

For many people a new year means a resolution or two.

Some hit the gym or start to eat more healthy food, but according to one survey, nearly a quarter of those asked wanted to become debt-free in 2013.

Charity 4children found that 23% of the 3,000 people it asked wanted to wipe out all their debt this year.

But Anne Longworth, the charity's chief executive, says the barriers to achieve this goal are starting to mount.

"When we asked people what they are worried about, they worry about capping and freezing of salaries, potential redundancies, changes in welfare but also their own personal debt, which we know is growing," she says.

"When we ask people, 'what's the biggest worry for them in terms of their finances', they say rising energy prices."

Energy bills

At the end of last year, a government funded lobby group warned that 300,000 more households could find themselves in fuel poverty over winter.

A household is considered to be in fuel poverty if more than 10% of its income is spent on home heating.

The Fuel Poverty Advisory Group estimated that nine million people could meet that criteria by 2016.

Energy prices rose by 7% on average last year, which took the average annual direct debit duel-fuel bill to £1,247.

The charity 4children wants the government to issue an immediate winter fuel payment of £100 to all low-income families.

Jack Neale, from the Money Advice Service, says that people should shop around for the best deal, initially by looking at what else their current provider can offer, but then looking to other energy firms.

"It is a simple process, it does not take very long, and it can save hundreds of pounds a year," he says.

Tackling debt

There are some simple steps that can be taken to reduce levels of debt, according to Mr Neale.

Image caption Jack Neale says that people should review their regular spending

He suggests listing every agreement that is held, including any overdraft, as well as any unsecured or secured loan agreements, noting the interest rates that are being paid on debts, and exploring the opportunity of "overpaying" debt rather than simply making minimum payments on credit card bills.

The Money Advice Service is one of a number of agencies that offers free personal finance advice services, along with Citizens Advice, StepChange and the National Debtline.

These groups can negotiate with lenders on an individual's behalf to work out a manageable and more realistic repayment scheme.

Saving and spending

With interest rates at historically low levels, how can people motivate themselves to save?

Setting goals is the key, says Mr Neale.

"One thing that will motivate people is actually to look at a goal such as a holiday, a car or even some emergency savings for a rainy day," he says.

"By setting a goal, you are more likely to achieve it."

He also offers some basic budgetary tips for those who want to be financially sound in 2013.

"Look at your income. Are you receiving everything you should be getting in terms of benefits? Are you on the right tax code?

"Have a proper look at your outgoings. Get hold of your last few months of bank statements. Look at what you are spending, including your direct debits."

He suggests people should consider whether they need to continue with payments such as magazine subscriptions, and keep track of their daily spending habits, perhaps with a diary.

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