Save £5k in 2021 by following these New Year resolutions

Almost three-quarters of Britons splurged on feel-good luxuries to help them get through 2020, according to a recent poll. But the good news is that one in five aims to rein in the spending in 2021 – which could save them over £5,000 a year.

Researchers from AA Financial Services found that 71% of the 2,000 people it polled confessed to spending much more than usual on treats last year, from alcohol and takeaways to impulse buys.

One in seven bought more online food luxuries and treats, spending £71 more than usual each month, while one in five spent, on average, £66 more each month on alcohol.

One in six (17%) treated themselves to feel-good/impulse buys, spending £68 more each month, and a similar number said they ordered in more takeaways than they might have done otherwise, spending £63 more each month.

Other items people spent more on each month in 2020 was books (11% spent £43 more), additional music and film subscriptions (7% spent £58 more) or buying box sets (6% spent £58 more).

Cut back in 2021 and you could save £5k

But it looks as if lockdown treats are on the way out, with one in five (19%) saying they planned to cut back on luxury items this year.

Two-thirds (63%) of those polled made New Year resolutions for 2021, with 29% pledging to save money.

People under 35 were almost twice as likely to have made a financial (79% versus 42% of people aged over 55). 

If people stick to these new year resolutions and stop spending an extra £428.88 a month, they could save as much as £5,146.56 a year.

Commenting on the survey, James Fairclough, director of AA Financial Services, said: “Cutting back on indulgences altogether in the New Year, particularly as lockdown looks set to continue for a couple more months yet, may be a little unrealistic. The odd treat here and there can be so important to lift spirits for people and their loved ones. 

“However, the good news for those looking to make a few cutbacks in 2021, is even small changes can potentially add up. This money can then be used as a financial savings net, or the start of an investment habit.”

Did you make any financial resolutions?

If you didn’t, there’s still time to set a few now – below are the top resolutions made in the poll: 

To put a lot more money away in savings	29%
To avoid dipping into the savings I have to avoid spending on luxuries	19%
To get rid of my credit cards	12%
To add to my pension	9%
To invest in home improvements/ Increase value of my property	8%
To consolidate my credit cards and debts into a personal loan  with a simple monthly repayment	7%
To clear my mortgage early	6%
Explore ways to lower the cost of running my car(s)	6%