LONDON, 8 January 2003 — Whether your New Year’s resolution is to join the gym or give up smoking, spare a thought for your pocket as well because a few resolutions of the financial kind could repair your wealth while you recover your health.

Consolidate debts

There is little point saving £50 a month if you have a pile of credit and store card debts, as interest on borrowings is higher than on savings. It is far better to cut debt as much as possible before building up a sum for a rainy day.

Consolidation lets you see clearly how much you owe, making it easier to start paying it back. How you consolidate depends on personal preference, as well the size of your debts. You might opt to extend your overdraft, shift everything on to a credit card with a low rate of interest or take out a personal loan

Start saving

Everyone should have emergency money to replace the boiler or tide you over should you lose your job. As a rule, three months’ salary saved in an instant access account with a good rate of interest should be enough. Don’t put too much by as you’ll get better returns elsewhere.

Scottish Widows Bank is paying 4.05 percent gross on balances of £100, but this includes a 0.5 percent bonus. C&G pays 4 percent interest on balances of £100, including a 1 percent bonus for six months.

An instant access, mini cash individual savings account is a good alternative as interest is tax-free. Kent Reliance pays 4.4 percent interest, and Safeway 4.5 percent on balances of £10 or more.

Switch accounts

More than 70 percent of us still bank with one of the "big four" — Barclays, NatWest, HSBC and Lloyds TSB — even though they pay just 0.1 percent interest on current account balances and all but HSBC charge extortionate overdraft rates. With internet bank Cahoot paying 3.7 percent interest on balances and charging 7 percent on overdrafts, and the Halifax having recently raised its current account rate to 3 percent, now is the time to switch.

But considering that just one million people changed their accounts last year — between 4 and 5 percent of the total market — according to the Halifax, most of us don’t seem bothered.

It is worth it, though; the process should take about five weeks and your new bank will transfer direct debits and standing orders for you.

Use a broker

While insurance can be expensive, you can bring down the cost by shopping around for cover.

Researching the market has never been easier, particularly if you have access to the internet. Sites such as www.moneysupermarket.com or www.moneyextra.co.uk are useful in comparing prices for life, motor, home contents, building, travel and pet cover.

If you don’t have access to the internet, ring round a few brokers for a quote or call some direct insurers. Remember that the cheapest deal might not offer the most comprehensive cover, so try not to be guided solely by price.

If you are booking a holiday, resist the temptation to buy your insurance from the travel agent: It might seem less hassle but it will cost you more. And an annual policy is likely to be cheaper than paying for several single-trip policies if you go on holiday a couple of times a year.

If you already have cover, there may be penalties for switching to another provider. If so, it is probably worth holding off until the policy is up for renewal.

Remortgage

This is one of the easiest ways to cut costs because with interest rates so low, there are plenty of excellent deals available. As a rule, if you are on your lender’s standard variable rate, you can almost certainly save money by switching to a fixed or discounted deal. Contact a mortgage broker to find the most competitive products on the market.

Even if you have to pay a redemption penalty for switching, it might still be worth doing so. Mortgage brokers Charcol and London & Country both have calculators on their websites that enable you to work out whether you will make any savings when remortgaging and paying a penalty (www.charcolonline. co.uk or www.lcplc.co.uk).

Review pension savings

Those who aren’t saving towards a personal pension should make this the year they start.

The earlier you do so, the better will be your chances of retiring on a decent pension. (The Independent)