Are you running out of money at the end of the month or feeling that you aren’t saving enough for your future? Whatever your financial goals, our checklist can help you manage your finances.
Writing a thorough budget that details your income and expenditure is the only way to get a realistic picture of your financial situation.
A budget will tell you if you are spending more than you earn and highlight areas where you can potentially make savings. It might not be your ideal way to spend a Saturday afternoon, but you’ll likely feel calmer and better informed as a result.
Here is how to draw up a budget that will show you exactly where you stand.
Credit cards can be a great way of managing your spending, but they can become expensive if you don’t quickly pay off what you owe.
If you have credit card debt, you need to ensure you pay as little interest as possible.
Look at your credit card statements to find out:
What your outstanding balance is
How much you are repaying each month
What interest rate you are paying
If you are being charged a high interest rate, try to move your balance to a 0% balance transfer credit card.
This could give you two or more years of 0% interest in which to pay off the outstanding balance on your card. You may have to pay a fee to arrange this, but you may still pay less overall.
Here’s everything you need to know about how balance transfers work.
Paying your credit card off faster will also reduce the total cost of your debt. Once you have your budget, you can determine how much you can realistically afford to pay off each month.
Remortgaging could save you hundreds or even thousands of pounds a year if you find a better deal. Use our remortgage comparison to find a lower rate.
If you are currently paying your lender’s standard variable rate (SVR), you should be able to switch to a new mortgage that saves you money without paying a fee.
However, there is likely to be a fee to switch if you’re on a fixed-rate mortgage. In this case, you’ll need to calculate if changing providers makes financial sense.
Even if you can’t remortgage now, it’s worth noting when your fixed-rate ends so that you have plenty of time to switch to another deal before your lender moves you onto a costly SVR mortgage.
Cut the cost of your overdraft
Overdrafts can come in very handy at the end of the month. Nonetheless, they are expensive.
Thankfully, new rules have made it easier to compare overdraft costs of different current accounts.
Banks and building societies can no longer charge you a different rate for unauthorised overdrafts, nor can they charge you daily or monthly fees when you go into the red. Instead, banks charge a flat interest rate on the amount you’re overdrawn.
Most banks charge an annual percentage rate (APR) close to 40%. However, some challenger banks charge less, so it’s always worth shopping around, especially if you regularly go overdrawn.
Some banks may also offer free overdrafts for a limited period or a small interest-free buffer that enables you to dip into the red without being charged.
If you have outstanding debts, including loans, credit cards and overdrafts, look at how much interest you are being charged because you could pay less with a consolidation loan.
You can use one to pay off all your existing loans, so you have one payment to make. Look for a consolidation loan that charges a lower rate than you already pay.
Consolidation loans may not always be the right option, though. Here is how to work out whether you should consolidate your debts.
In the past, switching your energy supplier could save you more than £200 a year on your bills. Things are a little trickier now, with no deal available that is cheaper than the government-mandated price cap, but that doesn’t mean they will stay that way forever - so it’s always worth checking to see if you could save.
Changing your current account could save you money, and some can even earn you extra cash too.
If you always have a positive balance, look for a high interest current account that could earn you extra. If you regularly use an overdraft, look for the account charging the lowest APR.
If your contract has come to an end, make sure you shop around for the best broadband deal.
You could even switch your provider during your policy if you find a much cheaper deal. However, you may be charged a fee of up to £80 or have to pay the remainder of your contract. So check first.
You could save money by switching your landline to a cheaper plan. You can compare landline deals to find the best contract for you at the right price.
By shopping around and comparing quotes, you should be able to find cheaper insurance deals and cut your premiums.
Never let any policy roll over automatically when it ends. Shop around to make sure you get the best deal every year.
Visit our comparison pages to find the best deals on:
Don’t overpay tax
Make sure you are not paying more tax than you need:
Council tax: Check your council tax band to ensure you’re not paying more than you need to. Here is how to check if you are paying too much council tax.
Income tax: Check your tax code to determine if you are being taxed correctly. Here is how to work out if you are paying too much income tax.
If you find out you have been paying more tax than you should, you might be able to get a rebate. Here is how to claim your tax back.
Check to see if you could be claiming:
Universal credit: This has replaced several benefits, and you could claim for this if you need income support or housing benefits. Here is how universal credit works.
Winter fuel payments: If you were born on or before 26 September 1955, you could receive up to £300 with the winter fuel payment. If you are on a low income, you may also be able to claim a cold weather payment during periods of especially cold weather. If you are unsure which benefits you are eligible for, you can use the entitledto.co.uk benefits calculator.
If you are spending too much, you may need to cut back on a few things to get your finances back on track. Try to spend less on things like:
Groceries – switch to cheaper or home brands or try a discount supermarket
Entertainment – spend less on going out and cut down of TV subscriptions
High street shopping – cut back on electronics, clothes and beauty products
Travel costs – share a car to work to cut your petrol bills
For more ideas, go back to your budget or look at your bank statements to see where you may be spending unnecessarily.
These changes can be harder to make because it may mean cutting back on the things you enjoy, but they may be necessary to get your finances into shape.
Once you have been through your outgoings and made some cuts, or found a way of increasing your income, update your budget with the new figures.
Hopefully, these steps have helped you cut your outgoings enough to see an underspend each month.
If you have reduced your debt payments, switched to cheaper deals and cut back your day-to-day bills but are still overspending, it may be worthwhile getting expert debt advice.
Here is how to get free debt help, including which charities could help you.
Go through our ultimate checklist and see how many items you can tick off:
Write a budget
Pay less for your credit cards
Reduce your mortgage rate
Cut your overdraft payments
Consolidate your loans
Check your energy supplier
Switch your current account
Swap your broadband provider
Get a new landline deal
Pay less for car insurance
Save on travel insurance
Cut the cost of home insurance
Reduce your pet insurance
Check your council tax
Check your income tax
Check universal credit
Check child benefits
Check winter fuel payments
Use a benefit calculator
Reduce your grocery bill
Spend less on entertainment
Avoid the shops
Slash your travel costs
Get debt help if you need it