Spring has sprung and this time of year can feel like an opportunity to make a fresh start. So why not make this the year you finally get your affairs in order?
That can sound very formal and rather daunting, but a little time and effort spent on sorting out various admin and financial matters can bring with it great peace of mind.
So in this article we take a quick look at seven ways to get your affairs in order this spring.
Having a realistic monthly budget is an essential part of keeping your finances under control. You can create this in a notebook, on a computer spreadsheet or by using one of the many budget apps currently available. You can read more about some popular budgeting apps in our article How apps can help you to manage your money better – and it’s also worth checking with your bank if they have their own app that could link to your bank account.
All you then need to do is to list all your expected income and expenditure. Income is the money you can rely on coming in, for example salaries, wages, allowances, benefits etc. Expenditure is everything you might spend money on. For example:
Your budget will give you an overall picture of where your money is likely to go, and you then need to monitor your spending over at least the next couple of months to see how accurate your budget is and whether you have forgotten anything.
Once you get in the flow of checking your spending and managing your budget, it will become easier to understand your finances and see where changes need to be made.
Part of your regular expenditure may include paying off debts, such as loans, car finance or credit card repayments. The more quickly you can pay off debts, the more money you will save on the interest on these debts, and the more disposable income you will then have both for saving and for spending on other things in your life.
So it’s a good idea to take a close look at all the debts you are repaying and see if there are ways that you can start paying them off more quickly, for example by finding ways to increase your income. You may also be able to reduce the interest you are paying on debts, by moving them to loans or credit cards with better deals.
Having a plan to pay off your debts is a positive start in getting rid of them. Even if your plan shows that you won’t be able to completely pay them off for some time, it will encourage you to start thinking about getting out of debt and also to make sure that you don’t slip further into debt.
Mortgage rates have been big news recently with rising interest rates. The economy is still volatile but it’s always important to be on the lookout for a better mortgage deal, to see if you can remortgage to one with a lower rate of interest.
Even if you can’t find a better deal, or are unable to swap for some other reason, you could potentially save thousands of pounds by paying more into your existing mortgage. Most mortgages allow you to do this, and if you were able just to pay a little more every month this could help to reduce the interest owing on the mortgage, therefore bringing down the overall amount and reducing the length of your repayment period.
You can check out how much difference various repayments could make to your mortgage either with your mortgage lender or by using a calculator such as Money Saving Expert’s Mortgage Overpayment Calculator.
Is insurance worth the money? If you have various different types of insurance, the monthly payments can add up to a significant sum of money. And then if you realise you’re not actually making use of any of the benefits of that insurance it can seem tempting to cancel most of your policies. But then on the other hand, if things do go wrong, and you don’t have insurance, you can end up in a financial mess.
So the key thing is to ensure that you have the insurance you really need at the best price possible.
In our article Is insurance worth the money? we look at the following seven types of insurance and explore how important they are, and where to find the best deals:
34% of adults in the UK have less than £1000 savings, or no savings at all. The good news is that it is never too late to start saving.
The easiest way to get started is to open a separate account for your savings. This could be a regular savings account, an ISA, or some kind of fixed term savings account or bond. The key thing is to find an account that has a balance of a good rate of interest and accessibility to your money if you need it.
Start by paying a small amount every month into your account, and supplement this with any gifts you get, or regular and/or occasional savings challenges. Bit by bit your savings will start to grow, giving you the additional financial security of having money available when you need it.
Pensions are a bit of a mystery to many of us. The age at which you can claim your state pension is increasing to 67 between 2026 and 2028 and is scheduled to rise further to 68 between 2037 and 2039.
There are also occupational (workplace) pensions and your employer is legally required to automatically enrol you in this if you earn more than £10,000 per year and are aged between 22 and state pension age. With an occupational pension, your employer will usually contribute at least 3% of your salary into your pension. You can also make extra payments – either by Additional Voluntary Contributions or salary sacrifice – into many occupational pension schemes if you want to do so.
You can also choose to set up a private or personal pension whether or not you are in an occupational pension scheme. This enables you to save more for your retirement by paying in either on a regular basis or by a lump sum.
Pensions are a good way of saving for the future, and the more you can put in now, the better off you will be later in life. It’s also worth knowing that both occupational and private pension payments are usually eligible for tax relief.
Both occupational pensions and private pensions can also usually be accessed before state pension age, which could enable you to take early retirement from your job in future, without having to wait until state pension age.
Another key way to ensure that your affairs are in order is to make a will. Although it can be a difficult topic to think about, it is reassuring to know that in the event of anything happening to you, everything would be sorted and your loved ones would not be put under additional stress and what would already be a difficult time.
Check out our article Is it ever too early to think about making a will? for helpful information about how to go about making a will.
We hope that the above information helps you to get your affairs in order this spring. If you need a financial boost at any stage, remember that Munzee Loans offer online loans that may be able to help.
Check back here soon for more lifestyle and financial tips from Munzee Loans.
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