Today we’ve got a guest post from Les Roberts who took inspiration from my ‘New Years Resolutions’ and is also trying to eat less chocolate and more fruit amongst other things. Here Les shares his Financial New Years Resolutions, some of which I’ll definitely be taking on board!

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New year is a time to make fresh starts, take on new challenges and give up on old habits…only to revert to type a few weeks later as it makes life much easier and those habits must be old for a reason!

So instead resolving to learn something new (if you’ve been resolving to do this for more than a year then you clearly know all that you are ever going to know!) or quit drinking (probably achievable in January but wait ‘til everyone starts going the pub again next payday!) why not resolve to improve your financial situation?

Taking control of your money will most likely be a lot less painful than giving up chocolate and it’s one resolution that literally pays for you to stick to!

Below are five top tips to help you save and make the most of your money.

Be VAT efficient

The 20 per cent VAT rate is finally upon us but by being a bit more savvy about the way you shop you can keep down the cost of living.

In case you hadn’t heard, VAT rose from 17.5 per cent to 20 per cent on January 4th of this year as part of the government’s plans to boost revenue and cut budget deficit. And research has shown that annual energy bills for the average family (if such a thing exists!) will rise by £161 and the cost of food will increase by £230.

But VAT isn’t charged at 20 per cent on everything so it pays to know which goods are taxed at a lower rate and which goods don’t carry a VAT charge at all.

Those items that are included in the lower five per cent tax band are ‘necessary goods’ such as children’s car seats, mobility equipment for the old and services such as gas and electricity…which is just as well given the increases the energy companies are imposing upon us!

Items that are exempt from VAT are things like newspapers, books and children’s clothing so if you’re buying gifts for children it may make sense to buy books and clothes as opposed to expensive, VAT-heavy toys…but, although VAT-free, I would advise against buying any children you may know a newspaper for their birthday or Christmas!

When it comes to shopping at the supermarket, items that you may deem necessary, such as personal hygiene products, are subject to 20 per cent VAT but ‘staple foods’ such as fruit, vegetables, meat and poultry are exempt from VAT. Slightly more bizarre is the tax quirk that renders milkshakes, chocolate spread and tortilla chips as being VAT-free but subject’s sweets and snacks to the full 20 per cent charge!

Thinking about it, being VAT efficient sounds more difficult than quitting smoking!

Be energy efficient

As mentioned above, VAT is set at a reduced rate of five per cent for household gas and electricity but that doesn’t mean that it’s cheap to heat your house as energy companies are continually putting up their prices!

For example, NPower, British Gas, SSE and Scottish Power have all announced price hikes of up to nine per cent and by simply switching energy provider – probably away from one of those four – you could save yourself over £300 per year!

In addition, research by the Energy Trust has shown that by swapping your old boiler (the thing that heats your water not an in-law or disliked relative!) for a new energy-efficient one can cut your bills by as much as £235 per year.

Change credit card

A rise interest rates means that credit card companies will pass this increase on to their customers so try to dodge this bullet by taking out a new credit card. If you have a good credit rating you should have no problem being accepted for low rate credit card or even a 0% balance transfer and new purchase card.

If you take the interest away, which is often set at in or around 20%, then this means that you are only actually paying for the goods that you have purchased and not lining the pockets of the credit card companies. But, if you do this, be sure to keep an eye on when the 0% offer ends to make sure you make the most of the savings and don’t start paying interest again.
Also, if you are worried about being rejected and a negative credit card search being left on your credit history then sites like moneysupermarket off an ‘approved’ service whereby you can enter your details and be given a score out of ten on the likelihood of being accepted by a variety of lenders. The best thing about this service is that it doesn’t leave a footprint on your credit history.

Change bank account

Since the taxpayer bail-out banks have constantly been making the news, be it through the charges they levy at customers or the bonuses they give their shareholders. But what many people don’t realise is that they could be financially better off if they switch their current account through a better interest rate or free overdraft facility.

It’s also worth looking at the add-ons that some banks offer on their current accounts which can include things like breakdown cover and travel insurance at a reduced rate.

And changing banks is no longer the laborious task it once was as most banks now have a dedicated switching service that, once you have signed up, will transfer all of your money and direct debits or standing orders over to your new account.

And, one other word of advice, if the bank tries to charge you for taking out a current account then keep looking, you can generally get everything you need from a current account without having to pay a premium for it!

Claim what you’re entitled to

Although most people don’t think twice about paying taxes few of us actually claim back money that we’re entitled to and it’s worthwhile taking the time to go to the advice.org.uk website to see what benefits you could be missing out on.

So be it working tax credit, council tax benefit or child tax credit, there are a variety of benefits out there that could ensure that you can claim back some of your hard earned cash.

These are just a few ways in which you can resolve to make 2011 a better year financially than 2010 but there are also other measures you can take such as changing your mortgage, putting your savings in an ISA or making savings on your home or motor insurance.

So take the time to look at your finances and work out the best ways to save or make more money this year.

Article written by Les Roberts