Here are 13 simple things you can do right now to improve your finances. Some of them are so easy, you could even do them on your lunch break
That exciting summer buzz is officially in the air, so it's understandable if your finances have taken a back seat. But with half the year done, it's crunch time for any financial goals you've set yourself this year. So to help make sure you achieve your goals, we've put together a list of 13 things you can do today to improve your finances for the future.
1. Create a realistic budget
Budgeting can help you avoid overspending and free up money you can use to reach your goals. But only if you do it right.
The trick is to strike a balance. It’s good to be careful about how you spend your money, so that you don’t fritter it away with nothing to show for it other than a twinge of regret. Yet at the same time, you don’t have to cut out the things you love, as long as you budget for them. It’s all about making a mindful choice when it comes to your spending.
2. Switch energy supplier
The average British household spends £845 a month on bills. But you could spend much less — and save hundreds of pounds — by switching to cheaper deals.
For example, The energy helpline reckons households can save up to £537 a year by switching energy supplier.
Switching energy supplier is usually straightforward. Your new supplier will handle the switch, and there won’t be any interruption of service. You can find the best deal for you, based on your usage, simply by logging in ClearScore and heading to the 'Offers' page.
If you’re not able to switch because you're locked into a fixed plan, it’s worth trying other ways to cut your energy bills, such as running your home more efficiently.
3. Switch broadband supplier
Changing your broadband package could save you up to £336. That’s £873 a year (or £73 a month) saved without quitting your daily latte.
Broadband packages usually have a cheap introductory period, after which the price goes up. The UK market is very competitive, and providers come out with new offers throughout the year. So, switching could mean faster speeds for less money.
Switching your broadband involves setting up a new router and, possibly, spending a few hours offline. But time the switch so it happens while you’re at work, and you won’t notice.
4. Don’t want to switch? Try haggling
MoneySavingExpert found that 76% of broadband customers who haggle get a discount, an upgrade or both. The trick is to try at the end of your contract, as your provider will be keen to keep your custom.
5. Can you slash other outgoings?
It’s also worth checking if you could save on other bills. For example:
According to CompareTheMarket, new car insurance costs £428.65 on average, while renewing your old policy could cost up to £793.73.
Is your mobile contract about to expire? If your phone is still in good shape, it may be worth switching to a SIM-only plan
6. Check you're getting everything you're owed
We're not talking about checking under the sofa cushions here.
Uncover money in dormant bank accounts. According to CompareTheMarket, we’re collectively sitting on £1.2 billion worth of money we’ve “lost” this way. The website 'My Lost Account' could help you track these accounts down.
You may be eligible for a refund from an old energy supplier if your account was in credit when you switched.
Check your PPI status. You may be eligible for a refund on some accounts.
See if you qualify for any tax credit.
7. Make sure you're getting the best rates on your savings accounts
Interest rates have been pretty poor on most savings accounts for a few years now. And even when the Bank of England did increase the interest rate back in November 2017, only one in ten banks actually passed this onto their customers.
So even if rates do go up later in the year it’s not guaranteed to be good news for the money you have tucked away.
But don’t worry, there are a few things you can do to make your money work harder for you without relying on the base rate going up:
Shop around - Although the interest rates on many savings accounts aren’t that great at the moment, shopping around can help you get the best of a relatively bad bunch. Have a read of our article on different types of savings accounts to find one that’s right for you.
Lock away your money for longer - In general, the longer you lock your savings away for the better the return you’ll get. It might be worth looking to see if a notice account or a fixed term bond would work for you.
8. Reduce the amount of interest you're paying on credit
If you have high-interest credit or store card debt, it may be a good idea to shift it to a balance transfer card. These cards usually charge low or even 0% interest (but only for an introductory period). Balance transfer cards can also make managing multiple debts easier, because you’ll only have one monthly repayment to worry about.
9. If you don't have a credit card think about applying
There are a couple of significant benefits to spending on a credit card. But the main one is that it can help you to build a decent credit score. If you show that you can responsibly handle credit, then your chances of being accepted for a larger loan, like a mortgage, further down the line are much improved.
10. Commit to building a rainy day fund and automate your savings
The Money Advice Service suggests saving at least three months’ worth of essential expenses. However, every little helps. Debt charity Step Change reckons half a million Brits could avoid problem debt by having just £1,000 for emergencies. You could save that in 12 months by setting aside £2.75 a day.
Whatever your rainy day fund, it’s better to set a clear goal. The best goals are SMART — specific, measurable, attainable, relevant and time-bound. So, instead of “saving up for a rainy day,” try “setting aside £2,000 by the end of 2018.” It’s easier to track progress on the second goal, which helps you stay motivated.
Set up a monthly payment to send money from your main account into your savings account on the same day you get paid. this will help turn saving into a habit and help you budget. After all, you can't miss the money if it was never really there in the first place.
11. Download some financial apps
This one is the easiest step of them all. If you can’t imagine leaving the house without your phone, why not make the most of it and use it to help you sort your finances. Whether you’re looking for help keeping up with your spending, with saving or investing, the right app can make life a bit easier. Check out some of our favourite money management apps in this article.
12. Take control of your credit score
It takes time to build a great credit score. So, whether you plan to take out credit in 2018 or not, staying on top of it is always worthwhile. That way, when you do need to take out credit, you’ll have a better chance of being accepted and getting a good deal.
To keep your credit score in good shape:
Monitor your credit report regularly, so you can get in front of any issues before they harm your score. It only takes five minutes.
Use credit little and often, and make sure you never miss a repayment. This builds a history of good borrowing behaviour, which tells lenders you can be trusted.
Avoid making a lot of credit applications in a short space of time. This could give the impression that you’re desperate for credit (even if you aren’t), which could harm your score.
You can learn more about improving your credit score here. Or, even better, try our free Shape Up coaching plan for tailored tips and a handy to-do list to help you prepare your credit score for what’s in store in 2018.
13. Take these good financial habits into the future
As we hit the halfway mark of 2018, taking the time to go through these steps will help make sure your finances are back in a good place to help you achieve any goals you've set for the year.
But really, this is just a whistle-stop tour. To really set yourself up for future financial success, try to get into the habit of going through this list every couple of months.
That way, you're much more likely to stick to any resolutions you made and to achieve your financial goals not only for the year but also for the future.