10 Ways to Get Finances Fighting Fit!

They say look after the pennies and the pounds will look after themselves.  Great in theory, in practice it doesn’t always work that way … especially when costs are going up faster than income.  However, there are ways you can get finance fitter in both your personal and work life.

Holly Andrews, MD of finance broker KIS, gives 10 top tips on how you can watch every penny.

1. Set your main goal(s) for the year

Before you do anything else, it’s important to decide what your main financial goals are for the year ahead. This could be saving money for something specific like a house deposit or family holiday, building up an emergency fund or significantly reducing or paying off your debts.

Whatever it is you want to achieve, having this in your mind from the offset will steer you in the right direction.

2. Review the previous year

If the goal is to make significant changes to your financial position, then it’s important to review all of your transactions from the past year, or maybe two years, so you can figure out how you got into your current position in the first place.

Whether it’s your personal or business accounts you need to live, eat and breath the numbers so you can see where you are spending/losing/wasting.   You can also review all of your banking accounts to see what’s working for you, what’s not and where you can maybe get better interest rates.

Once you’ve done this, you can start to make a plan.

3. Create a realistic budget/plan

‘Make a budget’ is something you hear so often, but it really is important to do if this is something you haven’t done already. A lot of people associate the term ‘budget’ with strict rules on spending and various other restrictions.

Not true!  You can still splurge but a budget will monitor your income and outgoings, regulate and keep track of your spending, help you to pay off debt and help you to save money. Creating a budget is the first step to organising and re-gaining control over your finances if this is something you’ve been struggling with.

If you already have a budget in place, now’s the time to review it. No budget should ever be set in stone – income changes, bills change, and needs change – so you need to keep your budget up to date.

4. Review your credit report

If this isn’t something you do regularly, now is a great time to have a look over your credit report. You need to check for any discrepancies in personal details or account information as well as make sure that everything is up to date. It’s also a good way of viewing your current financial standing, and credit reference agencies will sometimes even give you advice on what changes you can make to improve your score which may be important if you need to borrow money over the coming months

You can also use your credit report to make sure you haven’t fallen victim to any kind of identity theft which could be negatively affecting your score, such as someone applying for loans and credit cards in your name.

5. Automate outgoings

Automating your bills and other outgoings is a great way of keeping everything on track. By having payments leave your account automatically via a direct debit or standing order means you won’t forget to pay a bill, transfer money into your savings account, or add to your investments.

You should especially automate the minimum payment for your credit card or any other debts each month. You can still manually pay off more than just the minimum payment, but having the minimum payment automated will mean that you won’t be adding to your debts by being charged for late or missed payments.

That said check the automations every so often …. Sometimes you can go on paying for things when you don’t need to!!

6. Consolidate your debts

If you have multiple debts – e.g., credit cards, personal loans, and store cards – and you’re struggling to keep track of everything then it may be time to think about a debt consolidation loan.

Debt consolidation is when you clear up all of your debts by transferring them to one loan, so therefore a single, and hopefully much lower, monthly repayment. You can get debt consolidation personal loans and credit cards, but the best interest rates and terms are available with secured loans.

Secured loans offer loan amounts from £5,000 to £2.5 million with terms of up to 25 years – most personal loans are capped at around 10 years. Longer loan terms and lower interest rates often make secured loans more affordable than personal loans. Secured loan lenders are also more lenient towards applicants with a chequered credit history so you may still be able to get a secured loan even if you have been turned down by other lenders due to poor credit.

7. Review your bills, direct debits and standing orders

It’s really important to regularly check through your direct debits and standing orders to make sure that you’re not paying for any products or services that you no longer use or need. This could be anything from forgotten subscriptions and gym memberships to vehicle or home insurances that you no longer need.

You should also check whether you’re getting the best rates and prices for all of your bills. It’s a well-known fact that loyalty doesn’t necessarily pay off when it comes to things like gas and electricity, car insurance and broadband providers. Companies like these will often have deals to attract new customers, so this is definitely something you can take advantage of.

Doing a simple comparison online using a comparison website like Go Compare or Compare the Market will show you if you’re paying too much on any of your bills and where you can get them cheaper.