It's that time of year when we look at our finances, but where should you start to get everything in order? We suggest ways that you can start to sort out your finances whatever time of the year it is.
It’s that time of year again when we look at our lives, assess them and make infamous New Year Resolutions. The reason we call them ‘infamous’ is that for many people they don’t last longer than a few weeks. Household finances are often something we look at, so what type of financial resolutions could we make that will last and more importantly really make a difference?
One of the reasons people often get into financial problems or pay over the odds for a utility or a service is that they don’t put the time in to properly look at it. And when they do the thought of assessing every utility provider, credit and bank provider, just seems too overwhelming. Why not put in the diary a date each month when you will look at two aspects of your monthly expenditure-a utility bill, a credit charge, a standing order and see if they represent the best deal out there. By approaching your finances in this way things become more manageable and achievable. It may take more time to put everything right but better this way than to start a wholesale clear out that you don’t finish.
We have mentioned this above as something you should do when analysing your money but it really deserves its own section as it’s so important. You can save so much money each month by flipping your gas and electricity provider and with companies out there now to help you it couldn't’t be easier. You could literally be saving hundreds each year just by changing provider. Also look at your bank and credit card provider, in fact every supplier! Loyalty really doesn't’t work anymore so don’t be afraid to change provider for a better deal. We would also advise that this is also not something you do once, get into the habit of looking at bank and savings rates and also utility providers so you are always changing where possible to a better deal. Once you start doing this the process will get easier.
Many people don’t really have any idea where their money goes outside of the major payments like their mortgage. It can be really surprising how much those coffees, magazines and newspapers add up to. A good idea is to start making a note each week of what you are spending and then look at that over a month. If you can create a spreadsheet then all the better. This will help you to get a grip on where the money is going and where you could cut back if that is needed. The next stage is to create a budget.
Once you know what you are spending your money on the next stage is to set a budget. Quite simply you know your monthly income, take from that your mortgage, rent and utility costs, travel expenses, all the items that you consider essential. After this you can set a weekly budget for food and other outgoings. The weekly budget for food is an interesting one as one main way you can save money here is to menu plan each week, create a shopping list and then only shop for those items on the list.
It may sound really simple but not paying bills on time will cost you more and may also affect your credit score. Use a phone or calendar to prompt you regarding payment dates. If you are prone to missing payments why not switch to direct debit for these payments so it doesn't’t matter if you forget?
When we have our monthly outgoings in order, have looked at our expenses and got them in order and are setting and following budgets all well and good. But then Xmas, birthdays, anniversaries come along and throw a spanner into the works. But Xmas doesn't’t change each year, in fact many of these events are the same very year! So why not think about events like Xmas now and if need be create a savings plan. Putting £50 aside each month, earning some interest on it will mean that you don’t go into debt for Xmas.
So there are lots of things you could be doing which although small could have a real effect on your money and financial health. Simply knowing where you spend your money could really shock you and is a good place to start as it then allows you to set a realistic and sensible budget. Financial resolutions can work then if they are achievable and sensible, and could save you a fortune.