The beginning of 2021 looks set to be just as tricky in terms of their financial position for many people as the majority of 2020 was, so there has never been a better time to take a look at your finances and see what you can do to improve them.
Whether you are facing a reduction in your income, have something big in mind that you would like to save for or simply feel that you are spending too much, here are our tips for a financial overhaul in 2021.
Create a financial budget
If you have found yourself in a position where your finances have become particularly stretched, then the best place to start is by creating a budget. Make a note of your monthly income and your monthly outgoings. You need to ensure that you have enough income to cover the amounts that you are paying out. Put your outgoings into order of priority; you will need money to pay your mortgage or rent, utilities, and food shopping as an absolute minimum. The money that you have left over can then be used for other things.
Look at your direct debits and standing orders
Its surprising how many people find that they are still paying for something that they thought they had cancelled when they take a closer look at their finances. Grab a recent copy of your bank statement and take a look at all of the money going out of your account. If there are direct debits, no matter how small, that you do not recognise then now is the time to see exactly what you are paying for. If they relate to something that you no longer use, need, or thought you had cancelled then now is the time to make sure that these amounts stop leaving your account.
By the same token you should also look at your direct debits for your utilities and other bills. You may be paying too much for things like your gas and electricity and even your mobile phone bills; it can be worth shopping around to see if you can find better deals.
Are you paying for something twice?
It can be a good idea to look at any insurance cover that you have when overhauling your finances. Packaged bank accounts for example can often include cover for damage to your mobile phone or travel insurance so there is no need to take out separate policies for these items.
Pensions For A Better Financial Future
It is never too early to consider your finances for the future, and this means making pension payments. If you are eligible to join a pension scheme in your workplace then it is well worth joining. If you are already in a scheme run by your employer then make sure that you are paying in the right amount, if you can increase your contributions without causing any financial discomfort then it can be a good idea to do so, the earlier you start saving for your retirement the better off you will be.