Finances change on a fairly regular basis, whether you get a raise in your current job or start a new one, the prices on your utility bills can go up, and of course they will fluctuate with the seasons. Taking the time to conduct a personal finance audit can be a good way of keeping all of your finances in check and doing it in January, at the beginning of a new year, makes a lot of sense.
Gather your documents for your personal finance audit
If you want to complete a full and thorough audit of your personal finances you will want to gather all of the documents together that will allow you to do this; your salary information, bank statements, details of insurance policies (home, contents, car), any pension details and copies of your most recent utility bills. When you can see details of your income and all of your outgoings in one place it can be much easier to see how you are doing financially.
What should I look for when conducting a personal finance audit?
Obviously, the key goal of a personal finance audit is to make sure that you are not paying out more than you are earning, and hopefully making sure that you are able to put a little money aside at the end of every month to cover any unexpected expenses; things like problems with your car, a household appliance breaking down.
Utilities
It can be a good idea to check that you are getting the best deal in terms of your utilities. Check if you would be better of moving these to another company, remembering that if you are moving within a certain timeframe sometimes there can be penalties to pay.
Insurance
Car and home and contents insurance policies only come up for renewal once a year so if this is not January make a note to check them when they do come up for renewal. Too many people just automatically stay with the same company at a new rate, but this isn’t always the most cost effective thing to do.
Credit cards
If you are not paying off your credit card in full every month then you will be paying interest. See if there is a way that you can pay it off – you might need to tighten the purse strings for a month or so in order to achieve this. Once it is paid off then try to pay your credit card in full every month.
Loans
If you have any loans that you are currently paying off, take a look at their progress. If you are able to pay anything off in full then it is worth considering if this would be better for you financially. With some loans it may be possible to move them to attract a better rate – this is more likely to be an option if you are up to date with your payments and have always paid on time.
Make A Personal Finance Audit of Your Savings
Its never too late to start saving so if you have a little spare money every month consider transferring it to a savings account with a good rate of interest where your money will work for you and make some interest.
Bank statements
Check over your regular monthly outgoings, you would be surprised how many people find regular payments that they have forgotten to cancel.
