Dust away the cobwebs and tidy your finances
SPRING has sprung and it’s time to declutter and sweep aside the cobwebs. But this needn’t just apply to those overs-stuffed cupboards and neglected nooks and crannies around your home – you shouldn’t let the dust settle on your finances either.
Giving your finances a spring clean can be a great way to ensure you’re on top of your budgeting and making the most of any chances to save and spend your money wisely. Here are some suggestions from the experts on how to have a financial spring clear-out...
1) Negotiate a pay rise Laura Holden, spokeswoman for jobs website Reed.co.uk, says: “It’s probably one of the most dreaded conversations you’ll face with your boss, but as the saying goes: ‘If you don’t ask, you don’t get’.”
She suggests booking time to discuss your performance and using online salary checkers and job ads to ensure you’re not asking for too much or too little – and try to approach the conversation with a proactive, positive attitude.
Holden suggests highlighting past successes: but adds: “But if you’ve exhausted your options and feel undervalued, it may be time to look for a new role, and changing jobs is a great way to secure a salary rise.”
2) Ditch and switch Switching credit card, current account, energy or insurance providers can create big savings.
Kevin Pratt, consumer affairs expert at moneysupermarket.com, says: “If you’ve got a credit card balance that’s costing you interest and you can’t clear it, you can transfer it to a card that will not charge interest for up to three years, giving you chance to reduce what you owe. You’ll usually be charged a fee that’s calculated as a percentage of the amount you’re transferring, but the interest saved can often outweigh this.”
As for energy providers, he adds: “If you’ve not switched energy provider for a couple of years or more, or have never switched, you’re prob- ably on an expensive variable rate tariff. Switching to a fixed rate deal could save you £250.”
3) Pack insurance into holiday planning Malcolm Tarling, a spokesman for the Association of British Insurers (ABI), says: “Each year, travel insurers help hundreds of thousands of travellers whose holiday did not work out as planned - from having to cancel going, to falling ill abroad and needing emergency medical treatment. It is vital that you arrange travel insurance well in advance. It can make the difference between good holiday memories and a very expensive and traumatic experience.” 4) Give pensions a workout Sarah Coles, a personal finance analyst at Hargreaves Lansdown, says that as well as making sure you’re saving enough into workplace pensions, people “should also brush up on the scheme itself, and whether there’s anything extra on offer from your employer if you agree to pay more into the scheme”.
“The growth of your pension pot comes down to three things: how much you contribute, how long the money is put away for, and how much your investments grow,” she adds.
“The only part of this that doesn’t involve you working harder is investment performance, so it’s worth considering where your pensions are invested.”
5) Sort your mortgage Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “The general movement in mortgage rates is upwards, and anyone on their lender’s standard variable rate in particular might want to think about re-mortgaging sooner rather than later.
“There is no need to panic, but if you would struggle to pay your mortgage were interest rates to rise, then a fixed-rate deal makes sense and there are still some very competitively priced two and five-year fixes. There are longer fixes available but borrowers must not fix for longer than they are absolutely sure about – or you will have to pay an early repayment charge to get out of the mortgage early,” he notes.