Give Yourself a Financial Health Check
January is the perfect month to review your personal finances.
Just like your physical and mental health, your financial wellbeing is important too which is why you should assess your income and outgoings regularly.
This will help keep your financial goals on track and give a better understanding of how you manage your money. It’s also an ideal time to make changes where needed.
Here’s our top 10 tips:
- What are your financial goals?
Do you have a major event coming up like a wedding? Maybe your home needs some TLC? Do you need a new car? Or are you hoping to finally take your family abroad on holiday?.
- Where do you currently stand financially?
A survey of 3,000 adults, carried out for Talk Money Week (November 7-11), shows that one in six (17%) have nothing put away and another one in ten (9%) have £100 or less. Take a look at your savings accounts and work out how much you actually have once all the monthly bills are paid.
- Track your spending habits
Go through your bank statements and look at your regular transactions and expenses. This may highlight things you are paying for that you don’t need. If you have serious concerns about your income dropping or you struggle to stay on track with your saving then set yourself a challenge like a “low-spend fortnight”
- Draw up a Budget
List all the sources of income you have and all the types of things you spend on, so that you can see what is – or isn’t – left over.
- Loans and Debt
Make paying back any loans a priority. A credit card with 0% interest on purchase for the next 12 months, could be an option for financing any income loss or extra expenses, if you don’t have any cash savings. Remember that credit unions across Wales offer affordable loans from £100 to £15,000.
- Rainy day savings
Ideally you should aim to have enough money to cover 3 months’ worth of your essential expenses in an easy access savings account. In reality, this is rarely the case – particularly during the current cost of living crisis – but setting aside money for emergencies like a broken down washing machine or your car failing the MoT is important. You may be able accomplish this by siphoning some money out of another savings pot, or start from scratch using money you’ve trimmed from your spending.
- Benefits Help
Ensure you are claiming for any benefits that you may be entitled to. There may be other benefits available that you’re not claiming.
- Check your credit report
Having a good credit score and credit history can help you get lower interest rates, which results in you saving money! Checking your credit is an important part of a financial health check-up.
- Are you still on all the best deals?
Review your insurance premiums, utility costs and broadband and mobile phone bills. In the past switching energy providers was one of the best ways to save money on your bills. However, with the number of suppliers collapsing due to rising wholesale costs, it is likely that you are better off staying put for the time being.
- Check your pensions
Will you have enough money in your pension pot to retire when you want to? Look for the opportunities to increase your pension contribution if you can afford it, and make sure your target retirement date is correct.
Adopting healthy financial habits can take some discipline, but it gets easier once you get into a routine.
Join your nearest credit union today and access a range of savings and affordable loan options.