March is here and Spring has finally sprung. This month is usually a time when we would advise to spring clean your finances.
Why not use the next couple of days to do something positive and take a look at your finances. We have a long list of ways to spring clean your finances, but here’s our top 7 that we share with our clients.
Look at your bank account and review your direct debits and standing orders
Is there an item on your bank statement that you no longer use – an insurance policy or subscription? Look at your outgoings for the past 3-4 months and question whether your direct debits or standing orders are all still valid. If any are not valid then spring clean your finances and delete them.
Are you in your overdraft? How do you fix this?
During the lockdown, many banks provided customers with interest-free overdraft buffers lasting for three months. This is all well and good, but we would want you to consider how you can get into a position where you don’t require an overdraft on your account. You may want to use your savings to reduce your debt or consider a 0% money transfer credit card.
Are your savings earning you enough?
We are all aware that the savings market is not looking great at the moment. However, there is usually a better rate out there for your savings. If you have an account that pays less than 0.5% AER on your savings then it is time to make them work harder. If you would like us to look at your current savings, then please get in touch.
Investigate your current mortgage deal
During the lockdown, many people have had to ask their lender for a mortgage holiday. If you are not one of those people then you should check that you are not paying more than you need to on your mortgage. The most common mortgage deals are fixed-rates where you will pay the same amount each month at a competitive interest rate. Once this deal comes to an end, if you don’t remortgage, you will be automatically be placed on a ‘standard variable rate’ (SVR). Each lender sets its own SVR and the rate can be changed at any time and is usually more expensive than the interest rates on the fixed deals. If you would like us to look at finding you the best mortgage for your circumstances, then please get in touch.
Get a credit card that works for you
Firstly, ask yourself what is your credit card for? To buy items with or to gradually pay off your debt. For example, a 0% balance transfer card is good for when you are paying off debt. A 0% purchase card would be better if you are solely using it to buy items. Make sure you are using your credit cards in the right way to avoid paying more interest than you need to.
Consider your subscriptions
We think you will agree, our entertainment subscriptions are one of the main things that got us through the lockdown! So we are definitely not suggesting that you get rid of all of them. They can however soon add up. The likes of Netflix, Spotify, and Amazon Prime offer a shared account so you can split the cost. For example, paying for Netflix for one screen costs £5.99 but two people sharing an account that allows viewing on two screens costs £8.99 a month (or £4.50 each).
Check your retirement contributions
Saving for your retirement is not something you set and forget. You need to check this and reassess your plans and make sure your payments are on track to getting you there. We advise that a good goal to aim for is saving 10% to 15% of your income. So by the time you are 40 years old, you should have saved three times your salary and four times your annual salary by 50. If you would like us to look at the performance of your portfolio, then please get in touch.
If you would like help to spring clean your finances or to discuss any of the areas above in more detail, please get in touch to arrange a call or meeting.