It’s our mid-year financial focus to keep you on the right track for the next 6 months.
s we’re almost half-way through the year it’s a good time to take stock of finances. On the surface, the thought of reviewing money matters might seem like a headache. But in fact, getting on top of your cash can bring real peace of mind and help your mental health.
Not only is this time of year a good point to start saving for Christmas, it’s also good to think about making changes to your regular outgoings, such as gas and electricity bills, ready for winter. And if you want to make serious long-term changes now is a good time to think them through, especially in light of Brexit. For Catherine Morgan, a qualified independent financial planner, coach and money expert, it's about planning ahead for expected and unexpected costs. “Recently I was unexpectedly in hospital for a week, which of course left me unable to work,” she explains. “Financially, I was fine. I have an emergency fund in place. “One of the things we can do to be more financially resilient to these unexpected financial situations is to be more financially proactive than reactive.”
Having a budget will allow you to factor in saving some cash too. However, if you have debt, then it’s important to get it paid off. Deborah Vickers adds: “Before booking a trip to the Maldives, buying a new car or spending on expensive gifts, make sure you pay off any money you owe to avoid racking up serious debt. The more money you owe, the more difficult it is to pay off. Tackle the issue head on, and set out a plan of action. Fix the ‘easy wins’ first – think cutting down on cigarettes, chocolate, alcohol, magazines and any other impulse buys. Look at your disposable income and think about budgeting so you can pay off debt in an affordable way.” She also recommends checking your credit report as knowing your rating alerts you to any issues. You can either buy a one-off report or subscribe to a full service.
So how can you get yourself prepared?
“If you have a low credit score, with a little love and determination, steps can be taken to improve it which will help when it comes to taking out a loan such as a mortgage,” she says.
Make a plan
Learn to save
“Getting a financial plan in place is a crucial part of being financially secure,” says George Charles, of moneysavingheroes.co.uk. “There are plenty of good newer banking options, like Monzo, that allow you to keep a keen eye on what is going on with your banking and spending habits – there are even some that will make savings every time you spend.”
If you feel disheartened about having little or no savings don’t despair. Starting small is the first step. Being on top of what’s in your bank account and knowing how much you’re spending, makes it much easier to make cut-backs.
Indeed, understanding what money you have and how much you can spend and save is key. Going through bank statements is an easy way to identify any potential savings. Deborah Vickers, a financial expert and Director at personal finance and credit comparison site moneyguru.com, says: “At the start of the month, write a list of all your outgoings, starting with beefy bills 122
like rent, energy bills, food and transport. Deduct these outgoings from your monthly income and from there you can budget for smaller things and less necessary treats.”
“Instead of buying a coffee on your daily commute, make your own and you could save around £30 per month, that’s a whopping £360 a year,” says Deborah Vickers. “Think about minimising weekly takeaways, and walking rather than driving if you’re travelling short distances. Bigger cut backs may include reducing frequent long-haul holidays and downsizing your car.” You might only save a few pounds each month but it will build up and knowing you have a little pot of savings will provide reassurance.
Issue 89 - May/June