Posted on April 25th, 2019 | Categories - News
With spring finally here, we often think about tidying up our homes, undertaking projects and making plans for the summer. This year don’t leave your finances out of the traditional spring-cleaning routine. Taking some time to go through your money and financial plan could benefit you now and in the long term.
These eight steps can help you get your money and long-term finances in order.
1. Go through your day-to-day spending: Getting your finances in order needs to start with understanding how you’ve been spending in the past. Budgeting can seem like a dull task, but it’s one that can help you see whether your current habits are aligned with goals. You may realise that there are areas where you’re overspending or highlight those where you want to invest more. Setting out your expenditure and income gives you the base details to make the right financial decisions for you.
2. Set out goals: What do you want to achieve with your finances this year? Where do you hope to be by the time 2024 comes around? Considering what your goals are is critical for future success. Without a target in mind, it’s easy to miss opportunities and realise what you wanted to achieve too late. Financial goals should be a mix of short, medium and long-term timeframes, securing your finances now and well into the future.
3. Review your financial plan: Hopefully, you already have a financial plan in place. However, it’s important to recognise that things change. From your own circumstances changing to new legislation, reviewing your financial plan on a regular basis is a good habit to get into. It’s a chance to assess if it still reflects your overall goals and make adjustments where necessary. If you’ve yet to build a financial plan, it can help give you direction and confidence in your finances.
4. Check your savings accounts: Are you getting the most out of your savings? Interest rates are low, but that doesn’t mean you shouldn’t shop around to find the best deal available to you. Even a small increase in interest will boost your returns. If you don’t need to access your savings in the short term, locking them away for a defined period of time can allow you to access better rates. The Personal Savings Allowances means basic-rate taxpayers can receive up to £1,000 annually in savings income tax-free.
5. Analyse investments: You don’t want to constantly monitor investment performance, as market volatility means short-term dips are a part of the process. But that doesn’t mean you should neglect your investment portfolio altogether. You should frequently take a look at performance and how your portfolio matches overall financial goals. It’s a chance to seek opportunities and minimise potential risks too. Remember, when reviewing your investments to take a long-term view.
6. Assess your pension: While you’re looking at your investments, it’s a good time to check on your pension too. Whilst we often pay into our pensions monthly, it’s an area that can often be forgotten about. However, assessing how your investments are performing and contributions building up is important. It’s a step that can help ensure you’re on track to securing a retirement that you can confidently look forward to.
7. Evaluate debts: If you’re at a point in your life where you still have debt, the interest on repayments can have a significant impact on your spending. You should make paying off any high-interest loans a priority, improving your financial security in the future. It’s also a good idea to check the interest rates you’re paying on credit cards, mortgages and loans. Even a small reduction can cut monthly expenditure and allow you to reduce the debt quicker. Switching to a 0% interest credit card and remortgage to a better mortgage deal could save you thousands of pounds.
8. Check your credit report: We often don’t check our credit report until we need to apply for credit. However, improving your credit score isn’t usually a quick fix. If you don’t already, make it a habit to regularly check your credit report. This gives you an opportunity to swiftly rectify any mistakes and track your score. If improvements need to be made, set out the steps you’ll take to do so and build these into your overall financial plan.
If you’d like further support with your financial decisions, we’re here to help. Whether you want to understand what investments are right for you or check you’re on track for your dream retirement, please contact us.
Please note: The value of your investments can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.