Just as Brits like to spring clean their homes in March, this is the first year where many are now also looking to ‘spring clean their finances’ ready for the year ahead.
Financial spring cleaning is all about proactively budgeting and organising money, which can help people navigate the current cost of living crisis.
Novuna Personal Finance found that searches for ‘sort out finances‘ have sky-rocketed by 150 per cent over the last three months, while ‘how to budget’ is up 46 per cent.
To help people better manage their money and make the most of their monthly budget, the experts at Novuna Personal Finance have provided five handy tips to help Brits get ahead of their finances.
1. Review your finances
Before you can start making any savings, you’ll need to determine where your finances are currently at.
How much money comes into your account each month? What are the essential expenses? How much disposable income do you typically have to spend?
With that information, it’s much easier to identify where you can cut back on costs. For example, you may want to see if you can get better terms on your home or car insurance by contacting your supplier for a cheaper price.
Don’t be afraid to compare providers and walk away if your current insurer can’t offer the best deal (although don’t leave it too late to start the process, as you don’t want to end up uninsured).
2. Sort out your subscriptions
Take a look at the monthly subscriptions coming out of your bank account and think about how many of these services you still use and which ones you should cancel completely.
You’d be surprised by how many people sign up to a trial subscription and forget to cancel, leaving them paying each month for a subscription they didn’t even know they had!
It should be fairly simple to cancel the services you don’t need. If you really want to make the most out of your subscriptions for streaming services, just have one or two on the go at a time.
If you know a new film or series is coming out on a different service you don’t have access to, you could always cancel your current membership and swap it for the one you want instead. Rotating your streaming platforms in this way will save you paying for lots of different services all at once.
3. Sell strategically
If you play your cards right, you could actually benefit from the rising inflation rates the economy is seeing at the moment, with people willing to pay more for your sellable assets.
Make an inventory of your possessions, sorting them into ‘essential’ and ‘sellable’ categories. For example, do you use that second car on your driveway enough to justify the running costs or would it be better to sell up for a tidy lump sum? Research the price of similar second-hand goods online – you might be surprised which items have increased in value due to inflation.
However, while it’s a good idea to have a clear-out — and make a profit while you’re at it — you shouldn’t sell items you still have use for. The likelihood is that you’ll only end up buying them back at a higher price later down the line.
4. Deal with your debt
It’s important to stay on top of your finances and deal with debts as soon as possible.
When reviewing your monthly outgoings, take the opportunity to review any debt, such as credit card debt or small loans. Write down all your existing debts, along with their respective interest rate and term length. It’s a good idea to prioritise paying off the debt with the highest APR.
If you’d prefer to just manage one repayment, you could organise your finances further by using a personal loan to consolidate your debt. This means you’ll only have one loan to worry about, and all you need to do is make fixed-rate monthly repayments (potentially at a lower interest rate) until your loan is settled.
5. Make your weekly shop count
We’re all noticing the impact inflation is having on our weekly shopping bills.
Thankfully, there are simple ways to make the most of your weekly budget. For instance, don’t deviate from your shopping list – by browsing the aisles, you’re only opening yourself up to the temptation of adding an extra treat to your basket.
You could also opt for frozen veg or dried pasta instead of fresh ingredients. Not only will you save money at the till, but these items also last longer, and you won’t notice the difference when it comes to dinner time.
Shopping later in the day is another top money-saving tip at the supermarket. This is when supermarkets start reducing the price of produce, which is closer to its expiration date but still perfectly useable.
And if you’re still struggling to stick to a budget, leave your debit or credit cards at home. By only taking cash to the shops, you can only spend what you can afford, helping you resist the temptation to splurge on unnecessary items.