By Sarah Tallentire, financial planning consultant, Armstrong Watson LLP
Taking a closer look at what you’re spending as a family can help make significant savings. Here are some simple tips on how you can get your finances in order.
Create a budget and try to stick to it
By working out your family incomings alongside your outgoings, you’ll soon spot easy ways for saving cash, such as cutting down on takeaways or shopping trips for a single item.
If you’re looking to track your finances more closely, you could use an app to help keep on top of your income and expenditure budget. This will instantly show you how much money is spare so you don’t overstretch yourself.
Clear loans or credit cards with savings
If you’re just clearing the minimum payment on loans and credit cards despite having cash in the bank, then it’s worth doing the maths to work out what’s doing more for you.
Your savings could be earning little or no interest, while your payments are costing you money in interest.
While it’s good to keep a nest egg for an emergency, in this scenario you’re paying for the privilege of doing so – money that may be better spent elsewhere.
Take a look at your credit report
Whether you want to take out new lines of credit or not, it pays to stay on top of your personal financial data. In the UK, the three main credit reference agencies are Experian, Equifax and Callcredit.
Be aware that repeatedly applying for credit can harm your chances of getting credit, because lots of credit searches might indicate you’re having problems.
Review your insurance cover
Being underinsured or overinsured will cost you money either way. Whether it’s life insurance, home policies, car policies, medical bills or travel, or just a back-up.
In case products break down, put a date reminder in your diary a month before the renewal. You’ll then have enough time to shop around and ensure you get the best possible quote for your specific needs.
Don’t forget about your pension pot
For many people, retirement may feel a long way off but with UK life expectancy increasing it pays to think ahead. Many people choose to pay off their mortgage with surplus cash rather than invest in a pension. But for many, owning a home is still a dream.
Whether you’re a millennial or nearing the end of your working life, you need to keep a constant eye on how much your pension is performing and whether it needs topping up. Also, check your State Pension entitlement and the age you will receive it.
Use the internet wisely to save big
Online comparison sites are one quick way to save money, but consider using voucher code websites or buying online through sites where you can receive cashback on purchases from many top brands and stores.
Also, don’t forget to empty your browser’s history and cache when shopping for the best deals. Some sites remember if you’ve already looked at a product and won’t give you the best price, presuming you want the goods too much already – a tactic common among airlines and holiday websites.
Get your children involved in saving
Teaching kids the value of money can instil the financial skills they’ll need as an adult.
Set up jars around the home for them to put coins into. Visually seeing the coins mount up encourages them to save and skip impulse buys.
You could even write a monetary goal on the jar to incentivise them further–either the amount to reach or what will be bought, whether it’s a video game or a new bike.
These tips are just a few simple ways to spring-clean your finances – and there’s no time like the present to start. Keep a list of what you save each day, and you’ll soon be encouraged to save harder and faster as the amount grows.
Whilst we do not provide advice on areas such as loans, credit cards or general insurance we discuss how our clients can improve their financial position in these areas. For more information or advice, get in touch with one of our financial planning team on 0808 144 5575 or email help@armstrongwatson.co.uk.
