Spring cleaning your finances doesn’t have to be a chore!
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Spring is the season of new beginnings! For many of us, this means embracing tradition with a good clear out and spring clean – but knowing where to start can be overwhelming.
Instead of tackling everything at once, try doing one task at a time to make organising your finances much more manageable. So, whether you need to dust your direct debits or scrub some subscriptions we’ve broken down a list of financial chores into bitesize tasks to help you get back in control.
Know your finances
Figuring out what you’ve got coming in and what you’ve got going out is one of the key steps to getting your finances back on track. You might find it easier to write it all down or to work it out on a spreadsheet. Once you’ve done this, you’ll be able to see what changes you can make to improve your financial situation, along with what you can’t change.
Get the balance right
Making a budget is like going on a diet, if you cut back on everything that you enjoy it’s not something that you’ll find easy to adapt to. In fact, cutting back on too much from your budget is unrealistic and unsustainable, and it can have a negative impact on your mental health and wellbeing too.
Split your expenses into categories: essential costs, things that are nice to have and things that you don’t need.
Essential costs could be costs like rent, mortgage, utility bills, TV licence, council tax, travel costs, food and toiletries. Things that are nice to have could be socialising costs and a takeaway. Costs that you don’t need might be a membership for a gym you rarely go to or a TV subscription that you don’t use.
Understand your credit report
Your credit report is a record of how you’ve managed your finances over the last six years. It shows things like what credit you’ve applied for, how you pay for your bills, if you’ve kept up-to-date with payments and how long you’ve had each account.
You can use your credit report to help you to make better financial decisions. It will help you to understand what’s available for you and why things might not be available for you. Your credit status will help you to see what factors could be affecting your credit score, and fixing some of them could be a really easy way to improve it – like making sure you’re registered on the electoral register at your current address.
Find out more about how to improve your credit score here.
Check your insurances and tariffs
Check what’s available and find the best rates for the cover you need – whether that’s cover for your house, pet, car insurance or gadgets. Don’t forget that some packaged bank accounts include mobile phone insurance, breakdown cover or travel insurance anyway, so don’t pay twice and take advantage of the policies you’re already paying for!
Is it time to switch?
If you’re managing to keep on top of your monthly payments to your credit cards, but your 0% interest or low interest rate is going to end, it could be time to part ways with your provider and find a better deal. Shop around on comparison sites to see what alternatives could be available for you, some cards even give rewards like cash back, air miles or vouchers.
There could be fees applied when you balance transfer to a new card, so check what these are before you apply, and make sure that they won’t work out more than the interest on the card you’ve already got.
If you’re going to swap, make sure you’re eligible before you apply! Every application you make will go on your credit report, even if you get rejected. So be careful when applying for credit, as a lot of applications which are rejected will show negatively on your credit report.
Cancel un-used subscriptions
Take a look through your subscriptions to things like TV and music streaming, fitness apps and magazine for example. Figure out which ones you still actually use and consider cutting back on those you don’t to save yourself some money!
Think about saving
don’t have to save a lot for your savings to be effective. By routinely saving however much you can afford to set aside could help you feel more financially independent, and mean you worry less about money – particularly if you have an unexpected bill or repair to pay for. Before long, you’ll have built up some financial resilience to fall back on if your situation changes.
Take a look at bank accounts with the best savings rates and if you’re on Universal Credit or Working Tax Credit, you might be entitled to save with the Help to Save Scheme.
Open your mail
Although this sounds really simple, make sure you open your mail and don’t ignore any letters or emails from your creditors. We know it can be overwhelming, and many people find it easier to throw letters somewhere out of sight rather than facing the situation. Reading letters and emails is really important for helping you to stay in control. Once you know what’s in them, you’ll feel better equipped to deal with your situation.
Recognise the signs
t’s good to familiarise yourself with the signs that could indicate you’re at risk or already in financial difficulty. Signs that you might be struggling with your finances might be using credit to pay for your normal bills, using credit to pay for credit or using savings to pay for essential bills. You could also be receiving letters from your creditors chasing late payments or you could be paying the minimum payments every month, but the balances don’t reduce.
Another key sign that you might be struggling with your finances is when your health is being affected. If you’re feeling stressed, anxious or having trouble sleeping because of your situation, you could benefit from reaching out for free debt advice and support.
Have a look at our Financial Wellbeing Hub for our free tools to help you manage your finances and for more tips on how to manage your financial wellbeing.