Money Makeover after Christmas
Money Planning - Money Makeover after Christmas(Updated February 2012)
The tinsel and turkey is gone, ‘auld lang syne’ has been sung and the debris of Christmas and New Year festivities recycled. Even the Boxing Day sales started in November and we finally got paid in January. January is a long month for many.
The only thing to complete our start to 2012 is of course those bank statements and credit card bills that have arrived.
January is traditionally a ‘lean month’ for many and given that we may spend a few dark evenings in until payday, we always recommend clients revisit and overhaul their finances in general. By “servicing” your money, it will put you in good stead for the rest of the year.
How to Plan for January and Febuary ….
Budgeting
Go through bank statements and shopping receipts. Make a simple list of everything that you spent and where. Put them into categories of essentials and luxury and assess whether the money spent on any item could be better spent elsewhere. You will be surprised what is on your list and where your money actually goes.
- Consider setting up three accounts. A ‘bills account’, a ‘luxury’ account and a ‘savings’ account. If you only have one account, each time you go the ‘whole in the wall’ there is always money there that you spend. By establishing how much you spend on each area and controlling it, you will start to see savings build.
- Food – reassess your food bills. Could you buy it cheaper? Are those ‘two for one’ offers really that good. I have a saying: “you can only con a greedy person” and that is what some of these offers appeal to. Read the offers, check them out and use them, but only buy items that are on those offers, if the rest of your grocery list is cheaper elsewhere, then go elsewhere.
- Heating Bills – Fuel prices are going up. Go online and compare costs by using utility switching services you will probably find a cheaper deal. Turn your thermostat down just a couple of degrees, this may save you hundreds of pounds over the years and you won’t feel the difference.
- Petrol – make a mental note to write down the cheapest fuel station prices as you drive buy. Do not just keep going to the same service station you usually do. Filling the tank is expensive and you can save a few pounds each time by shopping around.
- Mortgage – lending costs and interest rates are expected to rise in 2012 as the cost of wholesale borrowing for mortgage companies increases and this will be passed on to consumers. Are you still on a low tracker rate? Has your fixed rate ended? Don’t leave your mortgage until it is too late to lock into a cheap deal.
- Insurances – There are usually cheaper life insurance, house insurance and motor insurance out there. Get some quotes.
- Credit Cards – if you do have card debt, do not just leave it on the same card. At the end of special offer or interest free balance transfer periods, credit card company interest rates increase to as much as four to five times your mortgage rate. Get your card bills out, consider paying them off from low interest bearing savings accounts now or switch to another nil balance transfer.
- Television – do you really need the all inclusive TV subscription?
- Internet – there are always better deals out there for your data allowance and often include free landline calls.
- Mobile Phone – check out your allowance on your tariff. Did you really use all those inclusive minutes and texts? Could your tariff be changed to a cheaper one?
- Gym Membership – if you have one, do you get value for money? Would a bicycle, walking, running or swimming be cheaper but just as effective?
- The investment market has changed. Worldwide sovereign debt problems in addition to Euro troubles and the risk of recession have made managing your long term investments a regular review essential.
- Do you have hidden commissions and charges being deducted from your investments that could be stopped or reduced?
- Would your money work harder if you review it with an adviser and switch funds regularly to growth areas rather than leaving it invested in areas tipped to fall?
- Your investments may be worth far more than your car yet you spend an hour or so cleaning your car every week and leave your money to “rust”.
- Book a money MOT makeover with an adviser today.
- Make sure you have used up any tax efficient allowances that you have.
- Is the first part of your savings been put inside an ISA?
- New Junior ISAs started in November, for your children that could not have a child trust fund, have you set up a Junior ISA?
- Have you used this year’s pension tax relief allowance, did you use up unused pension tax relief from last year?
- Have you used your capital gains tax allowance for this year?
- The latest date for filing tax returns for tax year 2010/11 was 31st January 2011.
- Don’t forget it. HMRC are very hot at the moment in automatically fining people for late tax returns. Do it now and save the fine.
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