Get your finances in shape: Ten things to check

Is this the year you’d like to get a firmer grip on your finances? This can seem like an overwhelming task. However, breaking everything down makes it more manageable.

To help you, we’ve put together a handy checklist so you can get your finances in shape. And, because having specific financial goals can help to focus your mind, we’ll also give a few examples to work towards.

Ten things to check

So let’s start with an audit of where you are right now. Then we’ll take a look at what your goals could be in the future.

1. Income and monthly outgoings

First things first. Work out how much money’s coming in and how much is going out each month. Once you’ve worked out the final figure you’ll know how much you have left for things like savings or paying off any debt.

2. Direct debits and standing orders

When reviewing your monthly outgoings, take a close look at your direct debits and standing orders. There may be ones that you’re still paying for like old insurance policies that are no longer needed.

3. Savings and investments

Then take a deep dive into any savings and investments that you have. Check the interest you’re making on your savings and how your investments are performing. If you think they could be better then remember to check out our reviews to see some of the other providers who come highly recommended.

4. Other assets

This could also be a good time to check in on your other assets. This might include jewellery, furniture, even clothes you don’t wear any more. If you decide you no longer need these things, there are plenty of places to sell them online.

5. Emergency fund

It’s recommended you have between three to six months’ worth of living expenses put aside for an emergency fund. This fund is for unplanned expenses or financial emergencies like losing your job or car repairs. Saving this amount isn’t possible for everyone. So try starting with one month, and then you can slowly build up to an amount you’re comfortable with. So make sure that you either have this kind of amount accessible or work out where you would get it from if you ever need to.

6. Loans and debts

Having high interest loans and other debts like credit cards is always going to affect your overall finances. So anything you can do to pay these off as soon as possible will be a big help. Look for credit cards with 0% balance transfer deals. And see if there is the possibility of using some of your savings to pay off loans early.

7. Your mortgage

If you have a mortgage it’s likely to be the biggest monthly expense you have. On a fixed-rate deal that is coming to an end in the next few months? Start shopping around now to avoid going onto your lender’s standard variable rate. We can help you find recommended mortgage providers.

8. Your credit score

Having as high a credit score will widen the number of options that you have when it comes to renegotiating a mortgage or any kind of loan. Register with one of the credit reference agencies like Experian to see what your score currently is. If you need to build it up, we can also recommend some score builders to help you increase it.

9. Insurance

Today we’re used to shopping around to get better deals on our car, home and other insurance. We may do this by ourselves online or via an insurance broker. Often we can save ourselves hundreds a year by finding the same level of cover at a much lower premium. So make sure that you run through your policies and see if there are savings to be made.

10. Pension

Generally, the earlier you start putting money into a pension plan, the better. When reviewing your pension arrangements it could be a good idea to talk to a recommended financial adviser. They will be able to have a general overview of your finances and explain some of your options to you. If you’re unsure how pensions work in the UK, you can find out more here.

Short, medium and long-term goals

Put all of the above into the context of specific financial goals you might have.

So, to give you a rough framework to start you off, a short-term goal might be to save enough money for a big holiday in the next couple of years.

A medium-term goal might be to move to a bigger home, maybe in a more expensive area, in the next four to five years. And a long-term goal might be to retire at 55.

Whatever these goals are, they can be very motivating. There are plenty of online tools out there to help you reach your goals.

So what are you waiting for? Let’s get started with some proactive financial planning.