New tax year, new resolutions? Have you always wanted to get your finances in shape? Financial whizz (well, not completely insolvent, at least) Dotty Winters shares her top tips for keeping the wolf from the door.
It’s a new tax year. Time to break out the bunting and throw a themed party. But before that, maybe it’s time for us to think about the habits we might want to start in order to ensure we are on top of managing our personal finances. So I dug out my biro and calculator from under my mattress, where I keeps my monies, and present my findings here, for your consideration.
1. Read your post. I get that this is pretty obvious but a surprising number of us don’t actually do this. Financial stuff can make people feel all sorts of levels of anxiety, but being armed with information is your best approach to getting on top of this.
Reading your post means checking your bank statements – and if you don’t recognise a payment, query it – reading letters from insurance companies, utilities companies (especially if they ‘estimate’ your bills), and letters which relate to tax and benefits.
If you live in 2017 and most of this communication is paperless for you, please interpret “read your post” to include your email, any number of online portals and any messenger pigeons you receive from the new hipster ISA you signed up for.
2. Know how much you spend each month, versus how much money you get in. This is easier if your outgoings are fairly stable and monthly, and if your income (salary, benefits, etc) are about the same each month.
Knowing what the gap is, in either direction, is useful to help you make decisions about any changes you make. There is a government-funded money advice service here: www.moneyadviceservice.org.uk/en
3. Shred your post. In spy movies messages self-destruct after being read to avoid them falling into the hands of baddies. In real life you have to destroy it yourself for the very same reason.
If you have important bits of paper you need to keep, file them securely. If you don’t need to keep them, shred them or destroy them in another secure way (I let my pet rats shred them, then compost the remains).
“Unless you already have a solid gold bathroom, you can probably benefit from the small amount of effort it takes to reduce your monthly bills. And if you already have a solid gold bathroom I will bet my cat that you already know how to reduce your bills.”
If your information is online, don’t write your passwords down, don’t use the same password for everything, and don’t provide security details to anyone who phones or emails you.
4. Haggle like a badass. Yes, yes, I know you might be British, but it is surprising how often you can get a discount just by asking.
If the thought of doing this in person makes you want to peel off your skin, at the very least you should use comparison websites to get quotes before automatically renewing any of your payments. Yes, it takes a bit of time, and that bloody meerkat toy doesn’t arrive FOR MONTHS, but last time I did this I saved nearly £200 on an insurance quote, even though I’ve regularly switched providers over the years. It may have taken 45 minutes, but as hourly rates go, I’ll take it.
Unless you already have a solid gold bathroom, you can probably benefit from the small amount of effort it takes to reduce your monthly bills (and if you already have a solid gold bathroom I will bet my cat that you already know how to reduce your bills and haggle).
5. Get your head round your credit rating if you need to. If you want to get a loan or a mortgage in future it is likely that your credit score will affect your ability to do that.
Your credit score is a measure of how profitable it will be for a company to lend you money, not a measure of how much money you have. This means it takes account of the likelihood of you paying a loan back, so missed payments etc can negatively affect it.
Credit reports are kept by a number of different organisations, so it is possible for your score to be different in different places. You need to pay to access some, but services like Noddle are free, so it can be a good place to start.
If there are any errors on your report – for example, mine was pretty determined I wasn’t on the electoral register – it can take months to sort, so the sooner you know this, the better.
Also bear in mind that if you don’t have any loans or credit cards this can negatively affect your credit score (WHICH IS NUTS), but if you need to improve it, spending a small amount on a credit card and paying if off every month can improve your score.
6. Ensure the details you provide are correct and up to date. Whether it is benefits, employee information or insurance details, it’s your responsibility to provide accurate information and to inform the relevant people if something changes.
For example, if the value of things in your house increases, or you get speeding points and don’t inform your insurer, this could invalidate your insurance and affect a future claim. This is your financial future, not Tinder. There is no room for artistic licence or pretending you remain frozen in time.
7. Financial advisors aren’t just for billionaires. If you need to sort a pension, have any savings (lucky you) or want to look at mortgage options, it may be worth getting the advice of a financial advisor.
This is often not a service you pay for (they are paid by the company if you sign up for a specific product) but you should make sure they are independent and offering you products from the whole market. Ask them this question if they don’t tell you.3058 Views
Nascent stand-up, fan of fancy words, purveyor of occasional wrongness, haphazard but enthusiastic parent, science-fan, apprentice-feminist.