9 February 2015
Spring clean your finances
As winter draws to an end, many of us will no doubt be thinking about getting healthier. But for many of us it’s not just our waistlines that need a health check but our finances too.
As another tax year approaches it is the ideal time to be looking at your incomings and outgoings with a view to cleaning your finances in readiness for the period ahead, and as it’s a well-known fact that pennies make pounds, reviewing your current account is the ideal way to start.
First, wipe out any historic direct debits and standing orders that you may have forgotten about by printing a month’s bank statement out and highlight the changes you need to make or that could be made. Ask yourself which of the outgoings listed are genuinely utilised on a month-to-month basis, and which ones may have seemed like a good idea at the time but in fact have been used very little throughout the preceding year.
How many times have you really made use of that online movie subscription, or that music streaming service, within the last 12 months? If the answer is less than a handful it could be time to reconsider just what ‘good value’ they truly represent.
It’s also a good idea to cross reference any insurances you may be paying to cover individual items such as your mobile phone or particularly valuable jewellery items, for example, with those listed in your overall household contents insurance. It’s easy to concentrate on the overall cost of a premium rather than the specifics covered when taking out a policy, and can lead to many of us effectively paying to insure items twice, so make sure any duplications are eliminated here too as it can save you money.
Similarly, take an hour out to review all of your existing utility bills and draw on the powers of one or more online comparison sites to check that you are getting the best deal, and don’t be afraid to switch providers where necessary.
Once you've minimised your outgoings, it is then time to turn your attentions to outstanding debts and think about how any overdraft or credit card repayments can be minimised too. If you are worried about your debts or finances then the best thing to do is to talk to someone. There are plenty of charities and organisations that can support you and help you come up with a plan, free of charge.
It’s always a good idea to try and clear any debts you might have before you can start saving, but if you are in a position to save then there is plenty to do.
Research the savings rates and products on the market that suit you and your needs. Look at your in-goings and outgoings and set a budget for how much you can save. Perhaps you can afford a set amount each month or just a lump sum at the start of the year; or can you afford to have your money locked away for two years or do you want access to your money throughout the year? There are a range of products out there and it is worth doing your homework to see which one suits your circumstances.
Similarly, anyone who already has money within an ISA or similar savings account should also be checking their current rate of interest as part of their own end of year financial clean-down, and again think about whether the product is right for them.
These are just a few things that may help you to save money and get your finances in shape for 2015. However, the main thing is to start planning and budgeting now as the pennies will soon turn into pounds.