We’re approaching the end of the financial year, and we’re also about a quarter of the way through 2014 - it’s time to clear out the rubbish, blow away the cobwebs and give your finances a spring clean to make sure you’re on the right track.
According to a recent survey by Lloyds Bank, 38% of families are still feeling the pinch - despite signs of growth in the economy. Whether you’re trying to make ends meet or simply want to make your money work harder, a little spit and polish can go a long way! You probably shopped around for the best deal at the time you chose your insurance, utility providers and other financial products - so why bother reviewing them now? New deals and rates come on the market all the time, so it’s important to shop around every so often in case you’re missing out! This applies to your current and savings accounts as well as your bills, insurance and other essentials. If you’ve got investments it is even more important to check up on them regularly, to make sure you’re not losing money and that your investments are still suitable for your needs. Equally, if you’re working towards a financial goal, you need to review regularly to make sure you’re meeting it and take action if necessary.
We’re a quarter of the way through 2014, which means you should be able to see by now whether you’re on track to meet your financial goals for the year. As we’re approaching the end of the tax year, providers and banks are looking ahead to next year so it’s a good time to refresh your finances generally. You should also consider reviewing your financial situation if you have a sudden change in your circumstances, such as a large windfall or becoming unable to work, or if there is a dramatic change in the market like a steep rise in interest rates.
How to go about it
Dusting down your bank accounts could be a good place to start. Take a look at the interest you’re getting on your current and savings accounts, and compare it to the best deals around elsewhere - but remember to read the terms of each account carefully, as higher rates may come at a price such as less access to your savings. If you decide to switch, it is now, in some cases, much easier to do so, following the introduction of the new current account switch service.
Next, you could follow the same process with your utility providers, insurance and other essentials. If you do switch, make a note of how much you’ve saved - don’t let that money disappear!
Are you on track?
There are a few questions you can ask yourself to assess the state of your finances:
- Are you in debt?
- If so, are you following a plan to pay it off?
- Do you have a rainy day fund?
- What are your goals, and are you on track to reach them?
Once you’ve answered these questions, you should have a clearer picture of your situation. If you have saved some cash by switching (well done you!) you can now decide how best to use it. You could put it towards one of your goals, use it to top up your rainy day fund, or boost your investment contributions.
Could you budget better?
Budgeting isn’t just for people struggling to get by - it’s the essential foundation of a sound financial plan. If you’re not currently using a budget, now would be a great time to start! Check out our detailed guide to creating a budget for more information. Of course, setting a budget is only the first step - a budget is fairly useless if you don’t keep track of it! Now is a good time to check whether you’re still on budget, and re-assess whether it’s working for you. It may be that you’ve been too strict in some categories and not strict enough in others, so play around with your budget until it really works.
The Money Hub tool from YourWealth.co.uk can help you to set and stick to budget, track your goals, plan your future and more - why not take a look?
We all feel better after a spring clean, so this week why not shake the cobwebs out of your finances?