Tips for new financial resolutions

It is that time of the year when people resolve to change their lives - to get slim, get a new job or get rich.

But good intentions alone are not always enough, especially when it comes to tricky finances.

So we asked money expert Sarah Pennells to give some free advice to people in a shopping centre in Enfield in north London.

The young mum

On paper, Sadia Janjua should have it all. Her husband is a doctor and the couple have just had a daughter. But she is worried.

Image caption Sadia Janjua says finances are stretched when you have a child

"I am finding that our disposable income is not going as far as it did last year," she says.

"With growing children, it is just not going far enough."

Her husband has had to work extra hours just to keep things steady.

Sarah's advice: "The first thing I would recommend is to dig out your bank and credit card statements, and actually look where every penny you spend is going.

"If you find you get to the end of the month, and you do not quite know where your money is going that you are spending every day, keep a spending diary. It sounds really, really dull, but it is so revealing and worth doing."

The graduate

Adam Fussell is doing the job that he loves - when he can get work. He is a freelance photographer, and is struggling to balance finding work with paying off his debts.

Image caption Adam Fussell is worried about debts and the opportunities for work

"I owe about £15,000, and have also maxed out my overdraft. That is another £1,600."

He wants some tips on how to manage that, and boost his chances of getting regular work.

Sarah's advice: "There are really only two options if you are in debt. One is to cut down on your spending, and the other is to increase your income.

"If you find you are spending money and you are not quite sure where it is going, just keep track of what you are spending, make a note when you are spending it, and try to cut back.

"And just make sure you never go over your overdraft limit because you will really be clobbered with charges and interest if you do that.

"In terms of your work, I would recommend trying to get your name out on freelance websites, and using social media. These could be a good way of getting new contacts."

The pensioner

Lawrence Harvest's big worry is how to stretch out his savings.

Image caption Lawrence Harvest is in the same position as many pensioners around the UK

He says: "Interest rates are very, very low, and the advice you hear is that they might not go up until 2013 or 2014. I have got government income bonds, but even they do not give a very good return."

Sarah's advice: "It is a really common problem and so many people around your age are finding the income they are getting from their savings and investments has really fallen. Unfortunately there is not a simple answer.

"All you can do is keep an eye on your savings rates. Some banks and buildings societies pay 0.1%, others pay 3%. So make a diary date, and look at swapping every year or every six months if you can.

"Do not tie up your money too much though, especially if you are worried about being able to access it or sort of other issues.

"Also, do not be tempted to take on risk. Some older people get advised to search for a higher income, without realising the risks they are taking on."

The shop worker

Five years ago, Pat Philpot was having serious money worries. She was in debt, and struggling to cope.

Image caption Pat Philpot has received help from a charity to manage her finances

"It was getting to the stage where we just could not afford it. We were transferring one credit card to the other and decided we had to do something about it really."

So she went to a debt charity and they helped put her on a debt management plan. It meant that her finances were finally under control. But she is frustrated about how long it will take her to pay everything off.

"It is hard, and we do feel like we are on a treadmill. It just seems like it is going to take a long while. But we do see light at the end of the tunnel now."

Sarah's advice: "Around this time of year, a lot of people find out they are in more debt than they can actually pay off. And it is tempting to try and transfer their debts and to manage.

"By going to a debt management charity to get that advice for free, and going on a structured plan, you have done absolutely the right thing.

"All you have to do is, when it feels like a real struggle and you are having to watch every single penny and make those sacrifices, is to focus on how brilliant you will feel and how liberated you will be when you finally are clear of your debts."

The newly-redundant worker

Until last November, Ena Sankar had worked in the same job for more than 20 years. She was a finance officer for the Ministry of Defence, but was made redundant.

Image caption Ena Sankar says she feels under pressure financially after being made redundant

She has been given a payout, but is trying to figure out how to move on.

"I have got a flat with a mortgage that goes on for many years. And like everybody else I have the shopping bills, the utility bills, the food bills," she says.

"I am extremely worried. I need to get a job of some sort - otherwise I am going to lose my flat, lose everything."

She also owes hundreds of pounds on her credit cards.

Sarah's advice: "The first thing to do is concentrate on finding a job, and almost make that your job. Be really disciplined about it.

"As regards your debts, you do not have too much on your credit card, but I would pay that off as quickly as you can. If you have money in your savings account from your redundancy, but you are paying much higher interest on your credit card bill, it does not make much sense."

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

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