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After a couple of tough years, all of us are hoping for a happier and healthier 2022. Find out how it can be a prosperous year too with our financial New Year’s resolutions.

Pick any that are relevant for you and find out what you need to do to whip your finances into shape.Ìý

Get yourself out of debt

COVID-19 has wrought havoc with many people’s finances and caused a personal debt crisis, according to the debt charity StepChange.Ìý

If you put Christmas on credit, or you are worrying about how you will manage to pay back your debts, it’s important to take action now.

If you have a good credit record, one relatively simple option is to transfer your existing credit card debt to a 0% balance transfer credit card. These cards will stop you being charged any more interest on the existing debt you’ve transferred over for a fixed period of time.

However, it’s important to note, a 0% balance transfer card is a tool which gives you time and space to focus on clearing your debts without having to worry about further interest accruing. You should not use them to make further purchases.

If an 0% balance transfer card is not an option for you, and debt repayments mean you are struggling to make ends meet then it’s important to get some debt advice.

Charities like and can help you get your finances back on track and if necessary arrange aÌý debt management plan for you. These charities provide their services free of charge - you should not have to pay for it.

Full details on managing financial stress

Improve your credit score

When you apply to borrow any money - from credit cards through to mortgages - the lender will need to check your credit score to work out whether you are likely to be a responsible borrower.

Your credit record is a bit like a report card outlining your borrowing history. It shows:

• How many credit accounts you have

• How much you currently owe lenders

• How many times you've applied for creditÌý

• Whether you've missed any paymentsÌý

• If you've had any county court judgments (CCJs) filed against you

• Whether you have had an IVA or been declared bankrupt

• Your current and previous addresses

• Any other applications you have made (e.g. for credit cards and mobile phone contracts)

• Any time a company has checked your credit record in the last two years

• Financial links with anyone you share an account with (e.g. a joint mortgage or current account)

Lenders use this information to try and predict your future behaviour and determine whether you are a reliable borrower.Ìý

With a good credit score your chances of borrowing are greatly increased. You will also be able to borrow more and at lower interest rates. This will be particularly important if you are looking to buy your first home this year and need to apply for a mortgage.

Full details on how your credit score works

You cannot improve your credit score overnight, however there are plenty of steps you can take to gradually boost your credit score over time.Ìý

Check your credit score and look for mistakes

As a starting point you need to check your credit score so you know what you are dealing with.

There are three main credit referencing agencies in the UK. These are Experian, Equifax and TransUnion. Each must offer you access to your credit record free of charge and it’s important to check all three because the information they hold may be different.

You can also check your credit record with the following services:Ìý

• *Ìý

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*These services offer access to your credit report free for 30 days, before charging for a monthly subscription

If there are any mistakes on your credit record you can ask the CRA to correct them. If this isn’t possible or you would like to clarify information on your credit record, it is possible to add a brief notice of correction.Ìý

Use a credit card

This may sound odd, but using a credit card can improve your credit score, especially if your borrowing history is limited.Ìý You just need to make sure you pay it off in full every month.

This will help you build your credit history and demonstrate to lenders that you are a reliable borrower.Ìý .

However, you should avoid withdrawing cash from a credit card, as this will leave a mark on your credit record and cost you interest.

If you cannot get a standard credit card it might be worth considering specialist credit builder cards.

You can compare credit cards here

Register to vote

Again, another one that sounds odd, but when you , two things happen:

• You will become a registered voter for your address

• There is an official record you live at your address

This improves your credit score, as lenders can quickly confirm your address.Ìý

Use your rent payments to build your credit history

Another way to prove your reliability as a borrower is to ensure your rent payments are recorded on your credit file.Ìý

This can be especially useful if you’re thinking about trying to get a mortgage to buy your first home. A common complaint from people who find it hard to prove to a mortgage lender that they’ll be able to make regular mortgage payments is that they have been paying rent regularly, often for many years.Ìý

Your rental payments won’t be recorded on your credit record automatically, however there are now a range of services that enable you to do this free of charge. These include:Ìý

Full details on how to improve your credit rating

Create a budget

A budget that shows how much you have coming in every month and what you need to spend it on can be a great way of managing your money and controlling your spending. This can be particularly important if you want to pay off debts or save as much money as you can.

There are several ways you can create a budget

One of the most simple and effective is an ‘envelope’ budget. This simply means separating your money out into pots, or envelopes, for spending on different things.Ìý

For example, you can create a pot each for household bills, food shopping and rent or mortgage payments.ÌýÌý

Find more handy budgeting tricks and tools in our coronavirus budgeting tips guide.

We also have a free budget planner tool to put you in control of your spending. You keep track of your pay, benefits and your regular outgoings in one place. You can save your budget plan and return to it at any time.ÌýÌý

Get into the saving habit

If the pandemic has taught us one thing it’s that it’s important to be prepared for financial shocks. Having a decent amount of savings in the bank means you’re prepared if you have an unexpected bill or if your circumstances change, for example you lose your job.

Experts typically recommend setting aside an emergency or rainy day fund with at least three months’ worth of essential living expenses set aside in an instant accessÌý account.Ìý

You may also have big life events coming up or simply want to put cash aside for big purchases, like a car or a holiday.Ìý

There are several types of savings accounts on the market and choosing the right one can help you boost the interest you earn.

• Instant access accounts: These usually pay the lowest interest rate, like 0.1%, but you can withdraw and add money whenever you want. If you want to make a decent return, try and avoid these accounts

• Notice accounts: These can offer a slightly higher interest rate than instant access, but you need to give notice to make a withdrawal, like 60 days, or face an interest charge

• Regular savings: These can offer the highest interest rate of any savings account, but there is usually a limit to how much you can pay in each month. Many are linked to current accounts and you can’t normally access the money for a year.Ìý

• Fixed rate savings accounts: These tie your money up for a set term, like one year. They do not offer rates that are much higher than notice accounts and restrict the access to your money even more

• Cash ISA (Individual Savings Account): These are tax free versions of the savings accounts above. Bear in mind you could earn up to £1,000 in interest before tax from any savings account each year, before deciding which type of account will give you the best return.Ìý

• High interest current accounts: These can offer higher interest rates than savings accounts. However, they usually set a limit on how much you can earn interest on, for example £2,500

Although interest rates are low at the moment, think about the access you want to your money. Usually, the more restrictive the account is, the more you could earn in interest.

Find out which savings account to choose here

Of course choosing the right savings account is only half the work. You also need to pay in as much money as you can. Once you have written your budget you should have a good idea of how much you can afford to pay in each month. Set up a standing order for the money to be paid out of your current account and into your savings account as soon as you have been paid. That way you won't be tempted to spend the money on anything else.

Get on the property ladder

If your main financial goal over the coming year is to save towards buying your first home, there are a few things you can do to help boost your deposit.

Open a Lifetime ISA

A Lifetime ISA can help you build up a deposit to buy your first property, or to fund your retirement, by giving you a 25% tax-free bonus each year.

You can pay in up to £4,000 a year, earning you a maximum £1,000 top up.

You can choose from two types of Lifetime ISA:

• Cash: You qualify for the bonus and earn interest based on what the savings provider you choose offers

• Stocks and shares: You are eligible for the bonus, but your capital will be at risk due to the volatility of the stock market

You should speak to an independent financial adviser if you’re unsure if a stocks and shares Lifetime ISA is right for you.

Research government schemes

There are a number of government initiatives designed to help you afford your first home.

The Help to Buy Equity Loan scheme, for example, offers first time buyers of new build properties in England loans worth 20% of the purchase price (40% in London). The loan is interest-free for the first five years, after which point a 1.75% interest rate is charged.

The maximum price of the property you can buy will depend on where in the UK you’re looking to live.

The scheme is available until March 2023 and you can find out more about it .Ìý

This scheme is for England only. There are separate schemes for other parts of the UK:

• , where the scheme works in the same way as the England scheme but has its own caps.

• , where you can buy a home worth up to £165,000 through their Co-Ownership scheme

• The Scottish Affordable New Build Scheme closed in February 2021.

Get help from an expert mortgage broker

Cut your energy bills

Many people pay far more than they need to heat and power their homes. Thankfully it is quick and easy to cut your bills by switching to a cheaper tariff.Ìý

If you switch, you could:

• Save more than £200 a year on your energy bills

• Find a more energy efficient tariff

• Get greater flexibility to switch in the future

There are a range of different energy tariffs out there, so picking one that meets your needs could help you save hundreds of pounds a year.