January is a great time
I'll admit, I've fallen in to both camps, depending on how optimistically I approach the coming year. But whether you buy into the idea of personal improvement based on a set day in the Gregorian calendar or not, January is a perfect time to resolve to clean up your finances.
For who hasn't felt their wallets creaking under the pressure of Christmas over-spending? As the reality of the season's spending dawns with each credit card statement that lands on your door mat, January is definitely an appropriate month for a financial health check.
There are so many ways, with a little attention, time and effort, we can tweak our finances and suddenly find ourselves not only saving the pennies, but the pounds... and often in the hundreds. Any spare cash is to be welcomed, whether it's to ease the monthly household budgets, or to put a bit away for your kids or a rainy day.
So here's my top ten list of things you can look at for a new year overhaul of your personal finances.
1. Talk to your service providers
Whether it's mobile phone, TV/broadband, or utilities, before you start searching for better deals the easiest thing to do is talk to your provider and make sure you're on the best deal. Then start haggling: no one wants to lose customers at the moment, so the threat of taking your business elsewhere, or cancelling a policy, is invariably greeted with a better offer. Sites such as www.uswitch.com and www.moneysupermarket.com will help you make comparisons.
With interest rates so low, it's worth a bit of time and effort to make sure the money you have put away for you and your kids is earning the most it can. Maximise your tax-free ISA savings each year and then look for the best interest rates. But watch the prevalence of one-year bonuses: unless you are the sort of person to make a note when the time is up and go through the search again, it may be more effective to look for the best non-bonus rates.
The changes in benefits may well affect you, not least as child benefit is no longer universal but means-tested. If either you or your partner earns £60,000 or more you'll no longer get any benefit with those earning between £50,000 and £60,000 finding it reduced on a sliding scale. So while on the one hand you should make sure you're receiving all the benefits you're entitled to, on the other it may be worthwhile to put more into your pension so your final salary brings you below the threshold where you may lose child benefit. This is a good way to keep your benefits and boost your pension pot.
4. Credit cards
Deciding on the best credit card deals depends very much on how you use them. If you often only pay off the minimum and have a permanent balance on your card then look for the ones with the lowest interest rates and 0% deals. If however, you pay them off in full each month the interest rate is less important than additional benefits such as loyalty points and cash back offers which allow you to earn as you spend.
5. Grocery bills
Food bills are rising and one sure way to reduce the amount you spend at the supermarket is to visit it less. One of the great benefits of online shopping is you're less likely to go 'off-list' and fill your trolley up with items you don't really need. Keep a list and don't be tempted by things you don't need just because they are on offer. You can also use www.mysupermarket.co.uk to find the cheapest online supermarket option for your shopping, if you're not particular about which store you buy from. Also, watch out for over-buying food, cutting down on food waste not only saves you money but is environmentally sound. Just buy what you need and you know you can use, and learn to love your leftovers.
6. Childcare vouchers
If you're using the right type of childcare, i.e. registered childminder or nursery and your company is signed up to the scheme, childcare vouchers can save up to £930 a year and apply to children up to the age of 15. By paying for the vouchers out of your gross income (the money is deducted at source) it means you don't pay tax or National Insurance on the money spent on childcare.
7. Loyalty cards
Don't just slip them in your wallet and forget about them. Make loyalty cards work for you and pay attention to where they can be used. For example, Nectar points can be redeemed on eBay now as well as BP, Ford and Expedia. Tesco Clubcard points can make trips to tourist attractions like Legoland and The Tower of London affordable, as well as proving useful when buying presents.
8. January sales
Although it sometimes feels like shops have permanent sales on at the moment, January still has the best. If you can get organised, these can really work for you: stock up on Christmas decorations, cards, wrapping paper for next year and it can also be a good time to pick up presents for later in the year, or perhaps the endless stream of kids' parties you have to buy for. Just find a good storage place where you won't forget you've bought them.
9. Keep a budget
There is nothing like writing down everything you spend to focus your mind. I'm a huge believer in this as a way of identifying where unnecessary spending goes. You'll be shocked at how much you can spend in a month at the corner shop or on coffees. There are online tools that can help you map out all areas of your household budget, such as www.moneysavingexpert.com/banking/Budget-planning. Or if you don't fancy going the whole hog, just jot down on a piece of paper everything you spend for a couple of months and you'll quickly see, and so get to grips with wasteful, incidental spending.
10. When the worst happens
While you're in the mindframe of sorting out your finances, it's also a good time to sort out your affairs should you die. The first thing to do is make a will, it's simple to do and will make a huge difference to those you leave behind. Think about how your family will be provided for: do you need life insurance, critical illness cover, mortgage protection, better savings behind you? Take stock while you're fit and well, and it will ease the stress and burden on you and your family should the worst happen.
Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial advisor about your own circumstances.