You might be one of the rare people who started saving for a deposit when they were six, keep a spreadsheet of their expenditure updated daily and have been paying into a pension – but not the state kind – since they left school. If you are, give yourself a pat on the back and clear off, because this article is for everyone else. The procrastinators. The financial heel draggers. Those people putting money matters off to tomorrow, or the day after that.
When it comes to finance, apathy is not your friend. It’s easy to delay taking a long, hard look at your finances – after all, it’s not the most exciting thing in the world – but the sooner you do, the easier and more rewarding it will be.
Reacting to financial needs as they come along, rather than proactively planning for the future, can leave you always one step behind and never quite in full control. A lot of us are guilty of this, and it can leave us with a negative perception of financial planning.
The good news is it doesn’t have to be this way. Here are a few tips to help you start looking at your finances positively and plan for the future.
Mortgage
If you already have a mortgage, don’t take it for granted that it’s still the right one for you. Perhaps your financial circumstances have changed, or your fixed term is ending soon. You could save money by shopping around, but don’t be dazzled by slightly lower rates; switching can cost you money, so it’s important to make sure the end saving is worth it. A mortgage broker can help you to find the right deal, and steer you away from offers that are all show and no substance.
Pension
Do you know when the ideal time to start saving for a pension is? Your early twenties. Retirement may feel like a long way off (until it’s right in front of you), but you’ll get the best payout later the earlier you start putting money away. Unfortunately, pensions have a bit of a bad rap thanks to some dodgy dealings in the 90s, but times have changed and there are a whole host of ways to start saving for a pension. To get the best deal, talk to a financial advisor who can set you on the right track and guide you away from overly risky ventures.
Debt
Loans, credit cards, store cards, mortgages, overdrafts, payment plans; much of the adult population of the UK is in some kind of debt. For most of us, debt is a financial necessity, and as long as it’s manageable and useful, it doesn’t have to be a bad thing.
However, it can be easy to live in the here-and-now a little too much when it comes to credit, adopting an ‘out of sight, out of mind’ attitude to debt. Change this attitude once and for all. Take more than a passing glance at your credit card bill, scrutinise your overdraft rates and see if you can switch to a better offer elsewhere. If the amount, or number of credit lines open, are getting a bit too close for comfort, prioritise which ones to pay down or pay off.