Spring cleaning your finances

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Spring is abloom.

You’ve cast aside the January Blues and battled your way through the rest of winter. But with the difficult and most unusual circumstances we now find ourselves in, you’re likely to be spending a significant amount of your time at home.

This is an opportunity to take the time to reassess and re-energise as we move into the next chapter of 2020. And, what better way than taking the time to tidy your finances?

After all, this is an ideal time to pause and take stock of your finances, looking back at the year so far and planning ahead.

Below are a few useful pointers you could explore to keep your finances on track, while possibly making some unexpected gains along the way...

Reassess your start of year budget

Assuming you set yourself some targets back in December/January, it’s a good time to check-in on your new year financial goals.

If you’ve been working to a careful spending and saving plan, now is probably a good time to review your progress. You could also use this as an opportunity to tweak your spending plan to more accurately reflect the change in your financial circumstance if you’ve been affected by the events that have unfolded over the last few weeks.

Perhaps you’ve noticed a need to curb your spending in order to meet your saving targets? Maybe you’ve reached a point where you’ve saved enough money to start a project you had been saving for?

Whatever insights you can take from your spending so far, it’s definitely a worthwhile exercise to try at this stage of the year - just to give you some indication of how you’re progressing financially, and what changes should be made to ensure you’re on the right track.

 

Check your credit report

Another way to track your progress, without needing to manually examine your previous spending, is to check your credit report.

Your credit report is one of the most accurate indicators of your financial health - as it’s completely informed by your data. Since lenders rely on this data to calculate your credit score, it provides you and them with a balanced and authentic overview of your present financial circumstances. There are a variety of credit referencing agencies that you’ll be able to obtain your credit report from for free.

It’s also worth accessing your credit report just to check your information is accurate and up to date. Inaccurate information can affect your score - so it’s always good to make sure it’s correct and error-free. Most credit agencies have policies and procedures in place for customers to dispute errors, so if you do spot anything that’s incorrect it should be straightforward to let them know.

Time to switch?

It might sound surprising, but a quick assessment of your regular monthly outgoings can sometimes show some opportunities to save money.

Since we all lead busy lives, many people often don’t usually have the time to scrutinise their utility bills. But, thanks to the price comparison websites - shopping around for deals is probably much easier than it’s ever been.

Switching energy provider can be a hassle, but if you find the right tariff, you could be shocked by how much you could save on a monthly basis. It’s also not as difficult, or time-consuming as you might think. In fact, it normally takes a maximum of 21 days to switch.

So, if you’ve been with your current provider for some time and think you might be paying over the odds - there’s no harm in looking elsewhere. It could have a very positive impact on your finances as your monthly outgoings reduce.

 

Review your monthly subscriptions

The same applies for non-essential outgoings - like subscription services.

You might subscribe to a magazine you just don’t have the time to read anymore. Perhaps your Netflix viewing time doesn’t warrant the membership?

Paying for unused subscriptions is a waste of money and this money could be reinvested into something else worthwhile, or even just into your savings pot. Taking the time to cancel your unused subscriptions is financial spring cleaning at its finest.

And, while you might find that some cancellations carry a small fee, the long-term savings could be worth it - especially as far as improving cash flow and growing your savings.

 

Ensure your tax code is correct

If you’ve recently changed job (as many people do at the start of a new calendar year), this could be well worth exploring.

The government won’t always notify you if you’ve been paying more tax than you should be - so you should try to ensure your tax code is correct. If it’s incorrect - it’s likely that the government will issue a tax rebate and at the very least, you’ll pay less tax.

Again, this one probably won’t be high on the list of your financial spring clean - but is definitely worth keeping in mind if you’ve changed job or suspect that you’ve been over-taxed.

Get app-savvy 

For many people, technology might seem a frightening prospect - but when it comes to your finances, it can do a lot of good.

Establishing a spending plan is one thing, but consistently keeping within budget can be challenging - which is why downloading a mobile budgeting app to supplement your spending could be a wise move.

What is a budgeting app? It’s pretty much exactly what it says on the tin - with a few more useful features that can help you maintain financial discipline. For example, there are some apps designed to link to your bank account and automatically set money aside - analysing your spending behaviours and transactions on a daily basis. Other apps like Money Dashboard and Cleo can help you to set budgets, with regular notifications to keep you on track.

Since these apps don’t cost a penny to download - it’s a fun and cost-effective method to help you stay on the straight and narrow when it comes to your finances.

 

Take the time to track your net worth

Your net worth is the value of all your assets. This includes non-liquid assets like your home, or car - minus your debts.

Much like your credit report, it’s a good indicator of your overall financial health - and therefore presents a good opportunity to spot the areas where some financial spring cleaning might be needed. For example, if you’ve had multiple jobs in the past, with multiple pension pots - you might choose to consolidate them all into a single, more manageable pot (assuming the cost to do so is worth it).

On the other hand, you might find new opportunities to invest, or even refresh your finances.

If your finances are in need of a spring clean because you’ve been affected by Coronavirus there are a number of helpful websites you can use including the Money Advice Service or Citizens Advice.

If you’ve taken out finance and you’re worried you won’t be able to meet the repayments in the short-term due to Coronavirus, make sure you get in touch with your bank or lender immediately so that they are aware of the situation. The sooner you get in touch, the more they can try to help you.

If you’re one of our customers and have concerns about the impact Coronavirus could have on your finances visit our Coronavirus support page.

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