New Year's Resolutions

It's that time of year when you make promises to yourself about joining a gym, cutting down on chocolate or taking up that hobby that you've always had an interest in.

But at this time of economic turmoil it's more important that ever to put your finances in order.

Defaqto's team of experts have worked together to highlight some Financial New Year's Resolutions to help make your 2009 as stress-free as possible.

1. Manage your debt

Defaqto's Principal Consultant for Banking, David Black, suggests that you overpay your monthly credit card and mortgage payments as interest rates have come down, but in the case of mortgages only do so if you will not suffer any early repayment penalties.

Black said: "With lower interest rates your monthly payments may reduce, but by overpaying the minimum amount required each month you will begin to reduce your debt more quickly."

2. Don't cancel your insurances

Brian Brown, Head of Insight warns you not to cancel insurance policies as a way to save money.

Brown said: "You need to carefully examine your personal circumstances and your policy wordings to form a judgement as to whether to retain your policy, seek cheaper alternatives or drop it altogether.

"For instance Payment Protection InsuranceI is the first safety net people fall back on before being forced to claim state benefits, so think carefully about how you would cope with paying off credit cards, loans and mortgages without an income."

3. Start planning for your retirement

Matt Ward, Defaqto's Principal Consultant for Pensions & Wealth Management believes it's never too early to begin planning for your retirement.

Ward said: "Spare cash is likely to be hard to come by at this difficult time, particularly with Christmas having only just passed. But it is important not to let your retirement planning slip off the agenda. Every year that you delay paying towards your retirement can significantly reduce the amount of income you will have once you retire."

4. Diversify your investments

Defaqto's Principal Consultant for Investments, Fraser Donaldson believes that diversifying your investments is the best strategy at the moment.

He said: "With so much uncertainty in the financial market at the moment it would be sensible to diversify your investments.

It is probably too late to cash in now, and there's a good chance that the markets are nearer the bottom than the top."