Take Control of Your Finances

Organising your finances needn’t be complicated or time-consuming, but it can make a real difference to how much money you have left at the end of each month, as well as your chances of getting a mortgage or other loan.  Here’s 12 financial house-keeping tips to get you on the right track.

1. Don’t worry, take action.  If you have been putting off reviewing your finances, then there’s no time like the present to get started. What you find might be better or worse than you are expecting but if you don’t have a clear picture of the money going in and out of your accounts, then you can’t make improvements.
2. Obtain your Credit Report and check there are no unknown details or nasty surprises.
3. Review your bank statements and all direct debits and standing orders – make sure you aren’t paying for things you no longer use or don’t need. Some accounts have fees for services not used or required, or you might still have an old gym membership running that you haven’t used in a while. People often sign up for free trials and then forget to cancel payments once the trial is over, even if they aren’t using the service.
4. Are you operating within your overdraft limit?  If not, think about having it reviewed. It is better to have a slightly higher limit and stay under it, than to keep going over a lower limit.
5. Complete a detailed assessment of all your income and expenditure, to see where all your money goes each month – this can be a sobering exercise if you critically assess what you spend and where.  If you spend £2 every week day on a hot drink or snacks, this would add up to over £500 over the course of a year! Is there anything you could cut back on and save money?
6. Check the interest rate for your credit card. Are there any better credit card deals available to you that could reduce the interest costs you may be paying if you can’t clear the balance in full each month?
7. Do you have a Direct Debit set up for your credit card so that at least the minimum payment is made each month? You can always pay more, but having a Direct Debit for the minimum payment means you’ll never fall into arrears or be “late” with a payment.
8. Have you opened a Lifetime ISA for your first house purchase (if eligible)? You can put in up to £4,000 each year, until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
9. Consider setting up a ‘budget account’ to pay all your regular household bills and direct debits. Transfer all the regular bills (Standing Order and Direct Debits) to this new account and set up a standing order from your current account to fund all these payments once a month, as soon as you get paid. That means you know your bills are covered and the money left in your main current account is what you have left for the next month. When setting up this account, ensure you think about all your bills, including those paid less frequently.
10. Review the benefits you get from your employer, if any, should you be off work through sickness or illness. You may be surprised how little some employers provide. Equally if your employer offers good levels of protection, make sure you aren’t over paying for other insurances.
11. Check your buildings insurance. Does it still cover the value of your property or any changes to the contents?  The price of gold has nearly doubled in the last five years so what you paid for an engagement ring or wedding ring might not cover its replacement value today. It’s always good to review this insurance with a specialist broker to ensure all appropriate risks are covered and that you are not “overpaying” through loyalty to an existing provider.
12. Review your mortgage. Too often people end up paying the lenders Standard Variable Rate when a deal they are on expires. Take the time to ensure you know when your present deal ends and ensure you review your mortgage three to six months before the expiry date, to see what other options may then be open for you to consider. If you are not on a deal, now has never been a better time to review your mortgage, with rates at an all-time low.

We love helping our clients to get their finances in order ready for their first house purchase, re-mortgaging or moving house.  We can advise on insurance as well as mortgages and equity release.

Whatever your situation, why not get in touch for a no obligation discussion about how much you could borrow and any adjustments you might need to make to put yourself in a better borrowing position.

Call 01676 533658 or email Sandy on sandy@mortgage-consultancy.co.uk.