The ultimate guide to spring cleaning your finances
Spring has arrived – even though it may be hard to believe – and it’s once again time to sit down and get your finances in order.
Here are a few tips on giving your personal finances a thorough spring clean:
• Cancel credit cards that you haven’t used in while. You might not realise this, but even having a credit card that you never use can negatively impact your credit rating.
This is because lenders look at the fact that you haven’t used the plastic at all, and therefore are unlikely to make them any money.
• Dormant debits: Ask your bank for a list of your direct debits and standing orders. You might be making out payments for goods and services you are no longer using.
If you decide to cancel any just make sure that you let the particular business know first, this will save you having to shell out for penalties from either the business or your bank.
• Cancel unused contracts. Did you sign up to a gym in January? Or get a subscription for that star-gazing magazine because it was on promotion and you always fancied yourself as an astro-boff…?
If you know there is something you’ve signed up to that is essentially money down the drain like unused gym memberships or store membership cards, cancel it now. Put the money towards something that you will actually appreciate, or maybe stick in an ISA.
• Bundle packages: get a package deal on your TV, broadband and phone line. They are now the cheapest they have been and will help simplify your outgoings into one low cost deal. Shop around as with any other financial product.
• Call up your mobile phone service provider. If you’ve been a loyal customer to one particular network then calling up to see if they can give you a better deal could prove beneficial. Remember that you will be a valued customer, and don’t go too outrageous with requests.
• Utilities: unless you are locked into a deal or plan, make an effort to properly review your usage on gas or electricity. Take a look at areas where you can save energy to cut down costs and see if there are any better plans you can get on.
Energy consumes nearly 50% of the average household’s weekly budget, so being able to make cuts here will prove beneficial. Also consider a water meter if there are more rooms than people in your home.
• Think ISA – yes, you’re probably sick of hearing about Individual Savings Accounts, but these tax wrappers are worth considering. They are the best way to save without the taxman getting a slice of the action.
• Teach your children personal finance. Our children have the disadvantage of growing up in a climate of recession, high inflation and the struggle to manage debt while attempting to get an education and a deposit for a house.
Teaching children the values of saving and understanding the small print could prove to be one of the most valuable lessons they receive in tackling financial matters early on.
• Sell unwanted goods. It’s spring and you want to de-clutter your home, so why not make a little money on the side? Sell off things you don’t want or haven’t used in a while.
• Shop around. If you have a smartphone and you see any amazing deals in the shops, it only takes two minutes to take a look online and see what other retailers are asking for the same products. This way you can find out if the ‘deal’ really is a deal. Checking through reviews also helps to give a good description of what the product is really like.
• Cost effective credit: if you know you have a few big purchases coming up, then it may pay to get a cashback or reward credit card. Putting big purchases on these cards can mean that you make money while you spend.
Take a look through comparison sites and shop around before you sign up to any particular card and make sure you pay off the balance every month; otherwise you undo the savings you make by using the card.
• Insurance: get the right insurance. Getting the right cover can mean the world of financial difference when it comes to certain things. Make sure you have the adequate insurance for your car, health and don’t forget your pet – vet bills have a bad habit of being unbelievably high!
• Life changes: if you have children, a house or are coming up to a certain age, you should consider getting a formal will. If the unexpected happens and you are no longer around, your loved ones will still need to be taken care of and your estate handled properly.
• Take interest: savers have been thoroughly punished in recent years with miserably low interest rates, but it’s still worth shopping around to find the better rate in the market. If you’re able to give a few months’ notice before you withdraw your pot, you stand a better chance of getting a good(enough) rate than if you needed instant access to your savings.
At the same time, look at investments you have and look out for charges and fees you may be unknowingly paying out.