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I’m a financial planner and here are three steps save you £4,500 this January

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A JANUARY detox is a great way to kick start healthy eating habits or a new fitness regime – but it’s also a prime time to get your finances in shape for the year ahead.

If your New Year’s resolutions are already starting to slip, fear not – there are some simple tips you can use to detox your finances and pocket almost £4,500 by the end of the year.

Financial planner Jason Hollands has some simple tips to help you reset your finances

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Financial planner Jason Hollands has some simple tips to help you reset your finances

Jason Hollands, managing director at online investment service Bestinvest, says getting on top of your finances is more important than ever as inflation is pushing the cost of everything up.

Already energy bills are set to rocket to more than £2,000 this year.

The cost of supermarket staples is also rising, any retailers have already warned of price hikes over the coming months.

That means making the most of your money is more important than ever.

Whether it’s moving your money to a better bank account or making the most of cashback and loyalty schemes, every penny in your pocket counts.

Jason says: “Inflation threatens to put a real squeeze on family finances, but there are things you can do to alleviate this.

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“Getting ahead of inflation should be a key financial priority for anyone in 2022.”

Here are Jasons’ three tips to detox your finances this January.

Check your bank statements – save £1,000

Looking over your spending in January might be painful as it’s likely you spent more over the festive period than you would in a typical month.

But taking the time to go through your outgoings can help you work out areas you can save.

“It’s all too easy to accumulate subscriptions and memberships you no longer use or could just live without,” says Jason.

It’s estimated that Brits are spending hundreds of pounds a year on subscriptions they don’t really use – whether it’s for the gym you never visit or the streaming service you never watch.

Look through your bank statement to see where your money is going, and consider whether you really need ALL of those services and direct debits.

Ditching all your unnecessary direct debits could even save you as much as £1,000 a year.

That comes from £79 a year for Amazon Prime, £72 for Netflix, £300 for Sky, £7.99-a month for a Deliveroo pass, and £300 a year for gym membership.

Add on £7.99 for a Tesco delivery slot pass, and £10-a-month for unnecessary insurance policies such as gadget protection that is likely already included in your home insurance anyway.

That all adds up to £967 – and might not include other direct debits such as old magazine subscriptions or cinema passes.

You should also be on the lookout for transactions you don’t recognise – as the Christmas period is a key time for fraud.

Switch, switch, switch – save £1,000

If you’ve been with the same provider for a while or your introductory offer has run out, the chances are you’re paying too much.

This goes for everything from your mobile phone and broadband, to your home and car insurance.

Use comparison sites such as GoCompare and Confused.com to shop around for the best deals.

It’s best to set a reminder or note in your diary for one month before your deal is over to give yourself time to scout the best deal.

Cashback sites such as Quidco and Topcashback can also get your money back on your purchases.

Jason says: “You could also renegotiate tariffs – threatening to quit will often make providers respond with a a better offer and you might be pleasantly surprised by how many savings you can find.”

One Virgin Media customer recently revealed how they saved £264 off their bill just by asking.

If you save £22 a month on your TV and broadband like this savvy switcher, add in the average £300 a year saved by cashback website users, and the typical £253 saved by shopping around for car insurance.

Switching bank account could bag you an extra £150, bringing your total to £967

Boost your savings – save £2,426

When inflation rises, it’s eats away at the spending power of your money.

Simply put, if inflation is 5% then a loaf of bread that costs you £1 today will cost £1.05 in a year’s time.

That might not sound much, but it starts to bite when everything goes up by that amount and your salary doesn’t keep pace.

“Inflation hurts people with cash savings in the bank, especially when interest rates are so low,” says Jason.

He says it makes sense to find an account that will give you a decent rate of interest to try and stave off the effects of inflation.

According to MoneySavingExpert, the best easy-access savings account currently pays 0.7%, which means you earn £7 for every £1,000 you save.

Meanwhile, Nationwide pays 2% interest if you save up to £200 a month – if you put that amount away each month you’ll have £2,400 after a year plus £26 in interest.

First-time buyers could consider a Lifetime Isa – this lets you save up to £4,000 a year for a property and you get a 25% bonus from the government when you come to buy.

Cashback bank accounts get you money back on your everyday spending. The Chase bank account, for example, pays 1% for the first 12 months.

If you spend £1,000 a month, you’d get £120 in cashback over the year.

If you already have a rainy day fund for emergencies, you could consider investing some money through an ISA too.

Jason says: “If you invest small amounts a on a monthly basis and hang in for the longer-term, you are almost certain to get a better return than cash and beat the dragon of inflation.”

For newbies, he suggests a so-called tracker fund, which copies the performance of a stock market, investing your money in hundreds of different companies.

We’ve looked at how investing £78 a month could make you a millionaire by the time you retire.

As always with investing though, you should only use money you can afford to lose as the value can go up as well as down.

You should also be looking to tie your money up for a minimum of five years in case there is a dip in the stock market.

Martin Lewis warns energy bills will rise by £600 a year in April

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