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Money makeover

Summer is just round the corner, and many of us will be in the process of clearing our homes of clutter, getting it ready for those long balmy evenings - but there is no need to stop there! Too many of us neglect organising our finances, but give them a real spring clean with the help of Moneyfacts’ ten point checklist and they’ll be shipshape for the rest of the year.

1. Review your monthly expenditure
   • It’s important to work out where your money is going each and every month. Use our budget calculator to work out your monthly outgoings and your disposable income.
2. Where does your money go?
   • How much do you pay for your mortgage? It’s always important that you review your mortgage before your current deal ends as you could be paying well over the odds. Search for a new deal with the help of Moneyfacts
   • Are you getting the best deal on all your household bills? With energy prices falling the utilities market is currently very competitive. Shop around for a better deal and your wallet will be thanking you, especially by the time winter comes around again.
   • The same applies for all your insurance products. Decide how much cover you really need and whether it matches what you have. Switching to a cheaper provider really could save you a packet.
3. Check your borrowings
   • Getting rid of your most expensive debt first should be a top priority, so organise your payments to fit.
   • If you have a personal loan, it could make sense to consolidate or transfer, as long as there are no repayment penalties
   • However, if you have taken out payment protection insurance be careful. Try and get a settlement figure before you proceed as you may not be refunded as much of your insurance premium as you thought.
4. Switch that credit card
   • If you pay your balance off in full each and every month, opt for a credit card with no annual fee or one that will give you added perks such as AirMiles or online vouchers.
   • If you can’t clear your balance every month, why not switch to a 0% balance transfer credit card and pay off as much as you can each month, you could find yourself saving a fortune in high interest payments. Aim to pay off as much as you can by regular standing orders before the end of the card’s term or switch again.
   • Most importantly, do not use the same card for your spending, as a card that offers a low rate on balance transfers will usually have a high rate of interest on purchases.
   • Store cards also charge ridiculously high rates of interest. Think about switching that balance first.
5. Summer holiday spending
   • Using the wrong type of credit card abroad could prove to be a costly mistake. Most providers will levy a fee, sometimes referred to as a foreign loading fee, which is typically 2.75% on all purchases, and an extra fee is charged for all cash withdrawn overseas and interest from the date of purchase.
   • However, if you use Nationwide’s debit card, the Post Office’s MasterCard, or Nationwide’s Gold and Classic credit cards abroad, all purchases are commission free.
6. Cut up those unused credit cards!
   • Keeping a credit card you don’t use could leave you open to identity fraud.
   • It could also tempt you into flexing it – remember, if it’s not in your wallet, you can’t use it!
7. Cancel the non-essentials
   • Perhaps it’s that gym membership you took out with good intentions in January, or the insurance you’ll never need. Always take the time to examine where your money is disappearing to and cancel those unnecessary direct debits.
8. Get saving
   • With the new tax year now upon us, any initial savings should be directed to a tax-free Individual Savings account (ISA). Saving £300 a month will maximise your cash ISA allowance of £3,600.
   • After your allowance is reached, it’s a good idea to pool your resources in a high interest savings account. Compare our savings accounts best buys. But remember, it’s always good to have some cash readily available should you need it, so make sure you are happy with the notice period if it applies.
   • Make regular savings, no matter how small. If you make it part of your budget plan stick to it you’ll soon build up a considerable amount.
9. Switch your bank
   • Too many people put up with a poor service from their bank. Most current accounts also pay a ridiculously small amount of interest, often around 0.1%. Switching is easy to do too, so why not check out the best bank accounts.
   • There are still some monetary incentives to switch too. First Direct will offer you £100 if you switch, and Alliance & Leicester offer £50 if you recommend a friend.
   • Perhaps you are currently operating in the red and need a bigger and cheaper overdraft facility?
   • Remember, you also have more time to reclaim your bank charges.
10. Plan for the future
    • Once your finances have undergone this initial makeover, it’s important to keep them looking neat and tidy. Think about setting up a bills account to separate your necessary spending from your disposable income.
    • Also remember to plan ahead for the following year. If you are going on holiday, replacing your car or getting married, try and set up a financial plan.

So put some time aside to concentrate solely on your finances, and you’ll soon be enjoying the long summer days with no more of those sleepless nights.

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