We’re halfway through the year already. While we’re all (hopefully) enjoying brighter weather and longer days, this time of year also serves as a good time to reflect on the last six months and the New Year’s resolutions you may or may not have stuck to.
Using certain milestones to review various areas of your life allows you to consider some simple changes that could benefit you for the remainder of the year.
When it comes to money, now is a great time of the year to undertake a little bit of a tidy-up to make sure that you’re heading in the right direction. To get started, here are four tips you can do now to refresh your finances:
1) Review where you’re at financially
Begin your mid-year refresh by taking stock of where you are financially, to get a clear picture of where your money is going. The easiest way to do this is to get hold of the last few months of bills.
Now that you can see the bigger picture, this will help you to identify any areas that need attention. For instance, are you paying too much for anything each month? Are you prioritising debts over any further spending? Are your savings on track to meet your goals? Sit down and create a plan that addresses any weaknesses in your finances.
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2) Look for any unnecessary expenses or direct debits
Trying to build your finances when you’re spending or paying for items or services you don’t use is like attempting to fill a bath that has holes in it. By fixing the leaks in your bank account, you’ll find you have more money to utilise each month.
Do you make use of all those streaming services you’re subscribed to? Are you getting your money’s worth from your gym and health club membership? Does that food delivery service offer more value than going shopping yourself? With an estimated £688m spent on unused subscriptions in the last year, there are often many overlooked expenses you could safely cut each month.
3) Prioritise any expensive debts
First and foremost, it’s vital to remember that you always need to meet your obligations when it comes to repaying debt. However, if you find that you have enough money in your budget to decide whether to make additional repayments or put some away into your savings, the answer isn’t always as straightforward.
The key comparison to make in this situation is how much your debt will cost in interest against how much interest you could earn from your savings. If you have debts that will cost you more than you could earn, it’s worth prioritising paying these back before you put money into your account. Expensive debts, such as credit cards, store cards and overdrafts, are often worth paying off sooner when considering the bigger picture.
That being said, some debts, like personal loans or mortgages, have fixed amounts that you will pay every month. This means that, once you’ve budgeted for them, any excess money could be paid into your savings, where they can help you achieve your goal or go towards building an emergency fund.
4) Review your savings account
A big part of any financial tidy-up is to go over your savings and make sure they are in the right place or heading in the right direction for your future plans.
Should you already have some money put away, consider whether it is in the best place to benefit you. For example, have you chosen an account that will put your money to work with a decent interest rate to help counter the rising cost of living?
A fixed-rate savings account allows you to access a typically higher rate of interest as long as you are happy to lock your funds away for an agreed length of time, typically anything from six months to five years.
On the other hand, if you’re starting out on your savings journey, you may be looking for an option that allows you to earn interest, while still giving you the flexibility to access your money if you need to. If this sounds like you, then an instant-access account may be more suitable, allowing you to build up savings at your own pace.
When it comes to choosing a savings account to suit your financial goals, Atom Bank has a range of accounts to help you grow your money and they can be opened easily through our app.
Whatever your financial position, taking the time now to tidy up your finances can ensure you have more money at your disposal. Following these simple steps is a great place to start and allows you to enjoy the rest of the year with a renewed sense of financial control.
Aileen Robertson is head of savings at Atom Bank
