Rachel Springall, finance expert at Moneyfacts.co.uk is offering advice on how to spring clean your finances.
Spring could well be a favourite season thanks to the much-anticipated longer days and warmer weather. At the same time, it could give consumers the energy to start some home improvements or give them an opportunity to sort out their finances.
Dissect your finances
One of the first steps to a brighter financial view is to dissect household income and outgoings. If consumers can break down where they are overspending and what they could look to rein in on, it can make a world of difference. Starting a simple spreadsheet and keeping tabs on household bills and upcoming expenses, like holidays and birthdays, can help customers from being cut short.
Get an appetite for budget apps
There are an abundance of mobile apps that can be really beneficial for consumers to improve their financial health. Free apps such as Money Dashboard can be useful to establish up to date balances on current accounts, credit cards and savings, from many different brands. Customers can assign their outgoings to categories and easily see where most of their cash is going each month.
Pocket loyalty cards a new way
Consumers may be overwhelmed by the amount of loyalty cards that are available across the high street and might not have enough room in their wallet to carry them around every day, but this is where the Stocard app comes in. This app is completely free and enables customers to scan their loyalty cards to use on their phone. It’s worth spending a few minutes to get them added, and consumers may find they start earning many more points than before with this handy hassle-free app.
Cut down on non-essential spending
Just making a few changes to weekly spending habits can make consumers realise how much they could be putting away in a savings account. A recent study by Barclays Bank revealed that millennials spend over £400 a year on daily treats, such as a cup of coffee.
Saving this each year could go towards holidays and even the cost of Christmas. The top easy access account today for those who want to start saving from £1 without any withdrawal restrictions is from Marcus by Goldman Sachs® paying 1.49% gross, which includes a bonus of 0.15% for 12 months.
Take the thought out of saving with automatic deposits
Sometimes consumers may not feel they can find the time to make frequent deposits into a savings account, but thankfully there are ways to get this automated. This can be resolved using a simple free app like Chip, which connects to a current account and makes automatic deposits based on a user’s spending. This means that the money put aside is affordable and may otherwise just get spent.
Make use of ISAs
While savers will benefit from the Personal Savings Allowance, which allows basic rate taxpayers to take home up to £1,000 worth of savings interest tax-free each year (£500 for higher rate taxpayers), ISAs shouldn’t be overlooked. Some of the best easy access ISAs pay rates comparable to non-ISAs that require a small deposit, such as the Coventry Building Society deal paying 1.50%, which includes a bonus of 0.35% until 31 July 2020.
Help to Buy ISAs are also worth taking advantage of if savers are looking to buy their first home – thanks to the generous 25% Government bonus, but these will close to new investors in November 2019.
Move credit card debts
Moving credit card debts to a 0% balance transfer card is an essential way to avoid paying out on unnecessary interest and can help incentivise setting out a plan to get out of debt. There are even balance transfer cards around that are completely fee-free, such as the 27-month 0% balance transfer offer on Santander’s Everyday Mastercard. Customers could save £970 if they were to switch a £3,000 debt from a card charging 18.9%, and that’s if they planned to make a £100 fixed payment each month.
Take advantage of re-mortgage deals
Borrowers who are debating whether to refinance would do well to consider some of the latest deals to hit the market, as they could shave hundreds of pounds off their monthly repayments. Indeed, based on a £200,000 mortgage over a 25-year term on a repayment basis, the average monthly repayment on the average two-year fixed rate of 2.49% would cost £896.23. When compared to the current average standard variable rate (SVR) of 4.89%, this would see borrowers save £260.17 per month.