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Spring is finally here, which means we can’t put off spring cleaning any longer! Why not take the opportunity to reboot your finances as well? Here’s what you can do to get your money in order.
Reboot your finances: how to improve your money situation this year
Before we get started, we want to say: if you are in serious financial difficulty, then we recommend seeking advice from a professional organisation as soon as you can. StepChange and the National Debtline offer free, confidential advice.
Reboot your finances strategy #1: switch credit cards
Making only the minimum repayments on your credit card means you could take decades to pay off your debt. So, it is unsurprising that one of the quickest ways to save money on your existing debt is to transfer your credit card balance. Choose another credit provider that offers a better interest rate, and focus on paying off more debt and less interest.
In fact, January is the time of year that most people switch credit cards — with £1.63 billion switched over last year between New Year’s Day and the 1st of February.
To find a credit card that’ll help you save money and pay off your debt, look for: a credit card that has a lower interest rate than the one you have now and offers balance transfers.
If possible, look for a 0% balance transfer card with an interest free period. These are great for making fast progress on clearing your debts as you’ll only be paying back what you owe, not paying off interest.
Just remember the golden rule: make sure you pay off what you owe before the 0% period runs out. After that, you could be subject to hefty interest rates that put you back to square one. To help you get started and see which cards you’re eligible for, MoneySavingExpert have a great eligibility calculator which helps you find the deals you’ve got the best chance of getting, without any effect on your credit score.
Reboot your finances strategy #2: Think about your overdraft
Overdrafts are a double-edged sword: on the one hand, they’re perfect for giving you a safety net when things get tight, stopping you from missing payments and damaging your credit score. On the other hand, once you start to dip into your overdraft month after month, it can be a hard habit to break. In fact, in 2017, 2.1 million people in the UK were stuck in their overdrafts.
Plus, overdrafts can be pretty pricey. The prices between banks can differ wildly, with some offering flat fees and others charging interest. It is well worth shopping around for a better bank account with a cheaper overdraft if you’re looking to reboot your finances this spring. Those little fees and interest charges might seem small, but they add up quickly.
Reboot your finances strategy #3: Check your Outgoings
Netflix. Amazon Prime. That beer/gin/wine subscription that offered the oh-so-tempting free first month. That gym membership that you took out last January. That magazine subscription you always forget to cancel…
It’s so easy to almost completely forget about the little monthly outgoings that come and go without you noticing, but they can add up in a big way. An hour going through and cancelling the ones you don’t use — or could live without — can save you big bucks, and is a fairly painless — and, dare we say, satisfying — way to reboot your finances.
Reboot your finances strategy #4: Look into debt consolidation
If your debt has got a little out of control and crazy, it can be hard to keep track of who you’re paying, when and how much every month. And if you mess up and miss a payment, that’s really bad for your credit score. Not to mention the extra late fees you might have to pay. Debt consolidation can make the whole process much easier to manage. By taking out one big loan to cover all of your monthly payments, you can roll them into one payment of the same amount every month that can be easier to manage and can even be cheaper in the long run.
Find out more about debt consolidation loans and whether they’re the right call to reboot your finances this year.
Reboot your finances strategy #5: Budget, budget, budget
The last thing on the list is probably one of the best things you can do to reboot your finances: budget.
We’re not going to go into the many benefits of budgeting in this article. We all know that it makes it easier to save, it makes you more mindful of your spending, it helps you keep track of outgoings, etc. Instead, we thought we’d link off to three of our very best posts about budgeting so you can grab a cuppa and do a deep-dive into the techniques that can help turn your finances around this year.
How to use a spending diary: a spending diary is a time-tested way of keeping track of all of your spending and being more mindful of what is going out of your account. Plus, you don’t need a calculator, you just need a simple pen and paper.
Whip your finances into shape: in this post, we break down how to use a budget planner to make your money management easier.
Our favourite personal finance apps: we break down our three favourite apps for managing your money quickly and easily. There’s an app for budgeting, an app for saving and an app to help you curb your spending.
And there it is: 5 ways to reboot your finances this year. Did we miss any? Have you got a secret technique you use to keep your finances on the straight and narrow? Let us know in the comments below or on social media!
- Author The Bamboo Team
- Posted 17 April 2019