Spring has arrived: time to clean up your finances
Rachel Wait, consumer affairs spokesperson at MoneySuperMarket, gives her top tips for taking control of your finances in the year ahead.
She said: “Spring is a season that’s often associated with cleaning and decluttering your home – but it doesn’t have to stop there. This is the perfect time to look at your finances and take control – whether it’s coming up with a plan to clear your debt or making sure you know what payments are due to leave your account and when.”
– Declutter direct debits
Check your bank statements – you may find direct debits for an unwanted magazine subscription or gym membership still coming out every month, so cancel them if they’re no longer required. Old mobile phone insurance is also a problem area.
– Check your credit card interest
If you’ve got a credit card balance that’s costing you interest, you could consider moving the balance to a zero per cent balance transfer card. You may be charged a transfer fee, so make sure you factor this in to your payment plan and pay off the balance before the zero per cent interest free period ends.
– Shop around for your car insurance
If you’re coming to the end of your policy, don’t let it auto-renew – it pays to shop around as insurers tend to offer their best prices to attract new customers, and you could save up to £259. It also might be a good time to review any add-ons such as breakdown cover, courtesy car cover and legal cover. You might find it’s cheaper to buy breakdown cover as a standalone policy or that you’re already covered elsewhere, for example, by your bank.
– Improve your credit file
Whether you are applying for a mortgage or a credit card, it’s always a good idea to get hold of a copy of your credit file and check if you can improve it, for example, by registering on the electoral roll, which provides a proof of address and is checked as part of your credit score. Also, ensure there are no grammatical errors or spelling mistakes – these are an easy fix. You can add a ‘notice of correction’ if you spot anything incorrect, which allows you to explain why a payment was missed.
– Boost your savings
Have a look at the interest rates on your existing accounts to see whether you are making your money work as hard as possible. Saving rates are gradually starting to shift upwards, so you may find you can switch to something more competitive.
– Look out for incentives
Some current accounts pay better interest rates than savings accounts and cashback rewards. There are also many accounts offering financial incentives to switch. Just be aware you’ll need to pay in a certain amount each month and run a certain amount of direct debits from the account.
– Switch and save
If you’ve not switched energy provider for a number of years, or have never switched, the chances are you’re probably on an expensive standard variable tariff. By shopping around and switching to a fixed rate deal, either with a Big Six or emerging supplier, you could save £250 or more on your annual bills, in just five minutes.