Talk Money Week is exactly what it says on the tin! Encouraging everyone to take a look at the money stuff in their lives, something which is all too often neglected.
To help with this I have come up with my Top 5 Tips for getting your finances ship shape!
With finances being hot on the minds of most people right now it seems rather apt that Talk Money Week is here right now. We often don’t like thinking about this kind of stuff, preferring to bury our heads in the hope that any money worries will miraculously disappear; however that is generally the worst action you could take!
I have been guilty of this myself in the past and let me tell you it really does come back to bite you on the arse when you’re least expecting it, so I guess that in itself would have to be my Top Tip Number 1.
Deal with this shit now!
Getting a handle on your finances, what’s coming in and what’s going out isn’t a particularly exciting task but it’s one that is essential. It’s often the uncertainty of not knowing exactly what’s going on that is the worst part; and that is true of any situation, not just when it comes to finances.
It doesn’t have to be anything fancy, you don’t need to have a spreadsheet or high tech system for this kind of stuff. Simply writing down your income and expenditure is enough for you to be able to clearly see how your finances are stacking up.
Most of us have online banking so it’s easy to jot down the dates of all your direct debits, standing orders and regular payments, along with their amounts. Then you can also do the same for all your income.
I use the calendar on my phone to keep track of this information too as it’s something which I find really helpful.
I make a note on the relevant day for what’s coming out and what’s going in so that I don’t get any nasty surprises when I check my bank balance and discover considerably less money that I was hoping for because an unexpected payment has gone out!
How you record and keep track of this stuff can be adapted to whatever works best for you, but just make sure you do something!
Once you’ve got this basic info together it’s time to get a handle on all the other spending that you do.
You know when you go to the supermarket for bread and milk and end up spending £50 because a bottle of wine, some chocolate, maybe a candle and a nice fluffy blanket fell into your trolley by accident as you were wandering around? Please tell me I’m not the only person that does this!?
It can be mega scary looking at this ad-hoc kind of spending and adding it all up because almost everyone spends more than they realise on a regular basis, which leads me onto Top Tip Number 2, budgeting.
I don’t like this word as to me it signifies a lack of money, of having to watch what I spend, of not being able to buy the things I really want. A bit like the word ‘diet’. When you’re on a diet it screams out that you are denying yourself, that there are all these things that you want but you’re not allowed to put within a whisker of your mouth in case it falls in!
It’s the same with budgeting, it makes you feel as though you are constantly tracking yourself and can be exhausting, so you give up!
So I’ve made up my own system, which I call Amazing Allocation & Super Spending! (I love a bit of alliteration it and sounds nicer than a budget but is essentially the same thing!)
I allocate myself a set amount of money for my spending and I transfer it to a super duper card which give me cashback on all my purchases. I’ve discovered that this is the ultimate key to guilt free shopping! Now who doesn’t love a bit of that!
I leave the amount of money that is needed to cover all my bills in my bank, then move my Super Spending money onto my cashback card. I can see exactly what purchases I’m making as it comes with it’s own transaction and statement facility, and I can see exactly what I’ve got left for my Super Spending!
I’ve found that this is a great way to separate my money and make sure that I’m not spending money that I should be using to pay my council tax on aforementioned candles, blankets and to be honest anything that glitters and sparkles and makes me go ‘ooohhh, I need that in my life’!
Again, set up a system that works for you. A system that is simple and easy that you can stick to because anything too complicated means it’s unlikely to last which won’t do you any favours in the long run.
So that’s the basics covered, know what’s coming in and out, know when it’s happening and separate your spending money.
After doing this you may notice there is not quite as much Super Spending money left over as you would like there to be which leads me onto Top Tip Number 3.
A closer look at what you’re paying out for each month, what you’re spending on all the boring stuff like bills.
A staggeringly high number of people are over paying on the basic things in life, like electric & gas. In fact 9 million households are shelling out a massive 4 billion more than they need to be on just their energy bills! That’s ridiculous right?
Why pay more than you have to for these basic necessities?
Looking at this stuff may seem like it’s way down on your list of priorities, however when you know that you could be whittling down your expenditure and giving yourself more money for the fun stuff in life doesn’t it seem a little more appealing?
Just by switching suppliers for services like gas, electric, broadband, mobile phones etc could see you saving hundreds of pounds every year so it’s well worth allowing yourself a little time to see what you can change.
Water bills are often neglected too, and although you don’t have a choice in who supplies the water in your area it’s worth giving your local water a board a call to check that your payments are in line with what you are using. This is particularly important if you are on a water meter. Most authorities also send out water saving packages which consist of simple little devices you can add to your taps and toilet cistern to reduce the amount of water you are using and paying for.
TV packages are often paid for when they don’t need to be. Freeview channels and Smart TVs will often provide you with everything you need without having to pay for a service or subscription with a provider. With more and more programmes being streamed it’s worth checking what you are actually watching, what you’re paying for and what you can access for free.
The various insurances that most people have tend to account for some of those regular payments too. Shopping around when these come up for renewal can often see you making huge savings. Yes, it’s far easier to just accept the renewal quote but it’s not always the best decision when it comes to your bank balance. Make use of personal recommendations from people and the various comparison websites to check you are getting the best deals.
With all of these things though, sometimes the cheapest isn’t necessarily the best value. It’s important to weigh up what you’re getting for your money. If you’re paying a premium price but making use of all the extras that you’re getting a cheaper option may not be the best choice for you. However if you’re not using a service to its full potential there’s definitely some scope to evaluate what you’re getting for your money and making some changes.
Once the essential expenditure is sorted, taking a look at what else your paying out for leads me to Top Tip Number 4.
You know those free trials that you sign up for and then forget to cancel, the gym membership that you signed up for and made use of once? Yeah all of those things! They might be for just a few quid a month, but they could be for considerably more. Companies set up these free trials in the hope that you will forget and they will be able to fleece you of your hard earned money forever more without even noticing.
Check every automatic payment that is set up through your bank. These type of things are often made very difficult to cancel but in doing so you can often end up with a few more quid in your bank each month.
I regularly check my account for old direct debits too, for payments that have not been in use for a while and cancel them. If the direct debit is live even if you’re not subscribed or in a contract anymore you can sometimes fall foul of a sneaky payment coming out.
Check your PayPal account for the same automatic payments too, we often set up random things and forget about them so get them cancelled if they are no longer relevant.
The other area to check is your actual bank and finance providers which leads me onto Top Tip Number 5.
There are so many new bank accounts available which offer totally free banking, so if you’re paying for an account and paying for features and benefits that you’re not making use of it could be time to see what else is on offer.
You can often switch to a new bank and receive a bonus for doing so, I recently changed my bank as they were offering £175 to new customers, so I snapped up the free money!
It may seem like hassle, but the service provided usually means that the bank will take care of switching all your direct debits etc over to your new account so it’s not very time consuming on your part.
It’s also worth checking out offers on credit cards and loans for 0% balance transfer deals or products which offer a lower APR than you are currently paying on your borrowing. Again, it might take a little research on your part but the financial rewards you stand to gain from doing this are definitely worth it. Consolidating all your outstanding debts into one more manageable payment each month can often reduce your outgoings considerably.
There’s a lot of information out there on the various financial institutions and it’s good to make sure that the facts you’re getting are from a reliable and independent source such as the Which Magazine; rather than some random dude who has a lot to say about a lot of things which may or may not be true!
Once you’ve addressed all these areas you are likely to find that you’re able to make your money go further, then it’s time to look at savings and investments that could potentially be available to you. Again, it’s good idea to thoroughly research this area and gain knowledge from a trusted source before making any rash decisions.
There are so many ways to get a handle on your money, these are just a few basics which I hope will have given you a few ideas when it comes to reviewing your own finances.
In case you didn’t know, saving people money on their household bills is part of my business. It’s all totally free and people generally save a serious amount of money each month. If you would like a free review you can book a time to have a chat with me to see how much you could reduce your bills by, giving you just enough time to have a little extra money for Christmas!
(The super duper cashback is also part of this and you definitely need one of those to get lots of cashback on all your Christmas shopping!)
“You must gain control over your money or the lack of it will forever control you”