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Keeping on top of your finances can sometimes be an arduous and time consuming task, especially if you haven’t dared look at your statements for months. We can show you some simple steps to giving your finances a health check without spending all day.
Why bother?
It’s easy to neglect your finances, but unfortunately in financial circles loyalty often goes unrewarded, so if you doing nothing it’s almost inevitable that you’re losing out. The best way to make sure you’re getting the most from your money is to check what you need and what’s on offer on a regular basis.
What should you check & when?
It’s worth checking any financial product you hold, against what else is available as often as possible. The rates and benefits of credit cards, mortgages, and savings accounts change frequently and you could be missing out. Checking each of these once a month should ensure you finances stay in good health.
1. Your Credit Cards
Checking your credit cards on a regular basis is the best way to avoid paying high interest rates and fees.
Firstly find out exactly how much you have on your credit cards and then establish what you are using them for and how much interest you are being charged. This information should be easily available on your credit card statement if you’re not sure.
If you have an outstanding balance and want to get it paid off as quickly as possible then you may want to take advantage of one of the many 0% balance transfer credit cards on the market. After paying a transfer fee in the region of 3% they can hold any balance for up to 16 months without adding any interest.
Alternatively if you don’t want a deadline then you could look at the lifetime balance transfer credit cards on offer, they tend not to charge a transfer fee and charge a lower rate of APR on your balance of around 5-7% until you clear it.
If you’re unsure if you need a 0% or lifetime card read our article Lifetime vs. Interest-Free Balance Transfer Credit Cards.
If you need a credit card to make new purchases then you should look at the interest you are being charged for the privilege. Again you could potentially save money by swapping to a card that offers 0% on all new purchases.
Alternatively if you pay off your card balance in full every month then you may want to take a look at the cash back or reward cards on the market. They may give you something extra in return for your spending.
Once you are happy that your credit cards are in the right place then you should make a note of when any deal comes to an end and then re-evaluate your position to see what’s best at that point.
2. Your Savings
As with credit cards the first step is to check exactly what you have in savings and how much interest they are earning. If you don’t want to tie up your money then you may want to compare the instant access savings accounts on the market place to make sure that you’re getting the best possible rate.
Alternatively if you have some outstanding debts such as credit cards or loans then you may want to consider paying off some of the balance. Remember banks will always charge a higher rate for borrowing money than they pay on savings, so paying off some of your credit card or loan if you can afford to do so could save you money in interest.
If you’re not particularly impressed with your savings rates then you could also consider using some to overpay your mortgage. Most mortgages allow you to overpay by around 10% a year without any charge and if you are able to overpay now then it may mean your mortgage ends sooner than you expected.
3. Your Current Account
So easily overlooked when checking your finances, your current account is likely to be at the centre of everything! So it’s important to check how exactly you are using it and if it’s the best account for you.
If you are paying a monthly subscription for your account then are you still using all the benefits? There are definitely pros and cons to package accounts which you should weigh up before you decide . Could you get these cheaper elsewhere or at another bank?
If you are living in your overdraft and paying interest or fees every month you may want to consider switching to an account with a lower rate .
Equally if you are in credit all the time you might want to look for an account that rewards you with a decent interest rate or other benefits or perks.
Once you know what you’re being charged and are getting in return it can be quite quick to compare it to other current accounts each month, to keep on top of it.
4. Your Mortgage
If you’re a homeowner your mortgage is likely to be your biggest financial commitment so it’s really worth checking exactly what you’re being charged, especially if you’ve had your mortgage in the same place for a little while.
If you find yourself on the bank’s standard variable rate then chances are you could reduce your monthly payments by looking at the selection of mortgage products on offer or take a look at our SVR mortgage guide .
If you feel your standard variable rate is quite reasonable then it may be worth considering how you would cope if rates did begin to rise and weigh up the benefits of a fixed term deal.
If you are in a fixed deal then make a note when this ends as you mortgage re-payments are likely to change. You may also want to look at overpaying on your mortgage to reduce the term (if you can) as this will help to make you debt free quicker!
5. Your Insurance Policies
Most of us hold a number of insurance policies ranging from car insurance to pet insurance. Unfortunately the way that a lot of insurance companies operate means that if you stick with the same provider you will start paying more and more for the same cover.
The first step is to find out exactly what you are paying on each policy and make a note of when it is due to expire. Then when your time’s up rather than automatically renew with the same provider compare each with what else is on the market to start saving money on you Insurance.
The way you pay can also have an impact on the cost, often it can be more expensive to pay every month rather than up front. If you need to pay monthly then you might want to consider any extra charges and think how to get the cheapest monthly rate .
6. Your Utilities
Your utility bills, in the same way as insurance, can become more and more expensive if you stick with the same provider for a long time. So to start off you should find out exactly what you are paying for your gas, electric, broadband and phone and what type of deal you have. You should then look at what else is on offer so you know whether you’d be able to save by switching.
If you discover you are tied in to certain tariffs then make a note when they are due to finish and shop around for a better deal.
7. Your Budget
Writing a quick budget can be a really helpful way to manage your finances for the coming month, it will also highlight any areas where you are overspending.
Then going forward simply update your budget each month with any changes to keep on top of your spending and find out how much you should have left over to enjoy!
