The ultimate guide to spring cleaning your finances in 2017
Monday is the first official day of spring so this weekend could be the time to sit down and get your finances in order to help you save hundreds of pounds throughout the year.
Here are a few tips on giving your personal finances a thorough spring clean:
Cancel unused credit cards
If you’ve not used your credit card for a while, you should cancel it. 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 direct debits and standing orders
Take a look at the last three months of your bank statements to see if you’re continuing to make payments for goods and services that you no longer need, want or use, such as that pricey gym membership or magazine subscription.
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.
Broadband, mobile and TV switching
Loyalty and longevity doesn’t always pay when it comes to telecoms packages. Broadband suppliers must be transparent about pricing on deals so it should be easier to work out exactly what you’ll be paying each month. Work out what you’re paying now and what you could save by moving to a competitor. You could even see if you can negotiate a deal with your current provider, but remember to be polite and don’t make outrageous requests.
When it comes to your TV package, check to see which channels you actually watch. Recent data by Freesat revealed that 98% of the most viewed broadcasts with Sky TV customers in 2016 were aired on free channels. And with your mobile, compare prices of handsets and deals before signing up to a new contract. If you’re not fussed about a new handset, consider sim-only tariffs to cut your costs.
Switch energy and consider a water meter
Energy customers on their energy suppliers’ standard variable tariff could be paying up to £200 more than the cheapest energy deal on the market. Make time to compare energy tariffs – it could be one of the easiest ways to instantly save money on your household bills.
Water prices are on the up so as a general rule of thumb, if there are more rooms in your property than people, a water meter could work out to be cheaper.
Evaluate your mortgage
With surplus savings from your spring clean, you could consider overpaying your mortgage to erode the outstanding interest. Check to see the maximum amount you can overpay and if there are any penalties in doing so first.
If you’re on your lender’s expensive standard variable rate, a mortgage rate war has been brewing which means you could get a better deal by remortgaging with another bank or building society, helping to save you hundreds of pounds each year.
Use up your ISA allowance
Despite low interest rates, an individual savings account – more commonly known as an ISA – is still considered one of the best places to put your savings because of its tax-free status, year after year. For the current 2016/17 tax year, the maximum amount you can put away is £15,240.
Shop around for car insurance
Motorists have been hit with three insurance premium tax rises in the last couple of years and as a result, motor insurance has hit its highest recorded levels in the last quarter of 2016 – up 9.3% from 2015. If you’re coming up to your renewal, shop around on comparison sites to see if you can save on your car insurance.
If you have children, a house or have recently got married, 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.
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.
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. If you have debt on a credit card, a balance transfer allows you transfer the money owed on one credit card or store card to another credit card where the new lender pays off the debt for you. You then pay the new lender back, usually at a lower rate.
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.
There are sites like eBay or cashforclothing.co.uk, or if it’s sunny head to a car boot sale.
Teach your children personal finance to teach them how to budget, how to save, the value of goods and how to avoid debt.
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.