How to build longer-term financial resilience

Many people are concerned about the rising prices of everyday items. Reflecting on where you spend your money and how you manage it can help build longer-term financial resilience. Managing your finances can be a daunting task, but taking the time to review and assess your financial situation can have many significant benefits.

HERE ARE SOME TIPS TO HELP YOU IMPROVE YOUR FINANCIAL HEALTH: REVIEW YOUR PAYMENTS

By reviewing your Direct Debit payments, you’ll get a better understanding of where your money is going and where you can make adjustments to your budget. Ask yourself if the service or product provided is still needed or wanted. Consider cancelling any services that are no longer providing value for you. The same goes for regular subscriptions – if you haven’t used them in months or longer, it may be time to cancel them.

If a service or product still provides you with value, take a look at the payment amount charged by the company. Is this an appropriate amount for what you are getting in return? If not, consider reaching out to the company and negotiating a better deal. Many companies are willing to work with existing customers as they value their loyalty.

Review your direct debit dates. Do any of them clash and need adjusting? This is especially important around paydays when there’s often less disposable income available. Speaking to your bank about amending due dates could help reduce stress and ensure bills are paid on time each month.

CHECK YOUR CREDIT SCORE

It’s a good idea to check your credit score regularly. Doing so helps you stay on top of any changes that may be impacting your financial future and gives you the opportunity to address any issues before they become bigger problems. The better your score, the more likely you will be to benefit from lower rates on products like loans and credit cards, making your borrowing cheaper.

If you have an online banking account, you can often access your credit score through that service. It’s important to remember, however, that the figure you get from this type of service might not be totally accurate as they may not take into account all elements of your financial history. If you want an up-to-date and comprehensive picture of your credit situation, consider using a pay-for service like Experian or Equifax.

These companies will provide you with a detailed report of your credit score, as well as an analysis that can help you understand where your finances currently stand and any improvements you might need to make.

KNOW YOUR MORTGAGE

Mortgages can often be the biggest household expense. So, the first step to understanding your mortgage is to review your current deal. Make sure you know whether you’re on a fixed rate or a variable rate, as well as the term length and monthly repayment amount. You should also check what early repayment charges you may be liable for, should you decide to switch before the end of the term. It’s always worth comparing different mortgages with a professional mortgage adviser in order to make sure that yours is still competitive, especially if it’s due to expire soon.

When looking at potential new deals, bear in mind any differences between an initial discounted interest rate and the standard variable rate, which could start after an introductory period ends. Also consider various fees such as arrangement and valuation fees. Make sure you compare like-for-like products and factor in all the costs, including any potential penalties for early repayment. Your mortgage adviser will help you make sense of the market and find the right mortgage for you.

By carefully reviewing your mortgage, understanding what options are available to you and seeking professional mortgage advice, you can ensure that your home loan remains competitive and cost-effective. This will give you peace of mind knowing that your biggest expense is working for you, not against you. CHECK

HOW YOU PAY YOUR BILLS

It can also be beneficial to review the way in which you pay your bills each month. Are you paying too much? Is there a cheaper way to do it? Make sure that you compare providers and take advantage of any discounts available. There are a variety of options available that could save you money, such as Direct Debit discounts or better overall amounts if you pay as a lump sum. Direct Debit is one of the most common ways to pay bills and is often the default setting with many providers.

While it can be convenient, there may be other payment methods that offer more savings. For example, some companies offer a discount for those who choose to set up Direct Debit payments in advance; this could add up over time if you have multiple bills to pay each month. Alternatively, if you have regular monthly outgoings (such as rent or utilities) you could save money by paying as a lump sum. Some companies offer discounts for this type of payment, so it’s worth checking if it’s an option.

CONSIDER DEBT CONSOLIDATION

Debt consolidation can be a way to help save money, if appropriate. It could reduce stress and simplify your financial life. It involves taking out one loan to pay off all of your other debts, usually at a lower interest rate. This means you’ll have just one payment each month instead of multiple payments for each separate debt. Before considering debt consolidation, it is important to assess your current financial situation.

You should take into account the amount of debt that you have, what type of debts you are dealing with (e.g. credit cards or personal loans) and the interest rates associated with those debts. It’s also important to make sure you have enough income or assets available to cover the repayment costs associated with consolidating the debt. You should also consider the different types of debt consolidation options available.

For example, a balance transfer credit card may allow you to consolidate your debts into one account with a lower interest rate. Alternatively, you could take out a personal loan to pay off all of your other debts and then make one single payment each month. There are also more specific solutions, such as debt management plans and home equity loans, that can help if you find yourself struggling with debt.

DO A SUBSCRIPTIONS AUDIT

A subscription audit is a great way to make sure you’re not paying for something you don’t really need or use. Take some time to review the subscriptions and memberships that you’ve signed up for and determine whether they are providing value to your life. Start by going through all of your payment records over the past 12 months.

Make a list of any recurring payments that you can identify, such as magazine subscriptions, club memberships or meal kit delivery box subscriptions. It’s important to look out for one-off payments too, as these may be services that require an annual or semi-annual renewal.

Once you have identified all your current subscriptions, take some time to assess each one individually. Ask yourself: Do I still need this subscription or membership? Am I actively using it often enough to justify the cost? Does it provide value to my life in some way, either financially or just generally. If you determine that a particular subscription isn’t worth keeping, contact the company and cancel it. Be sure to ask for any refunds you may be entitled to as well, such as prorated amounts for unused months of service.

SAVE FOR UNEXPECTED EXPENSES

Having an emergency fund is a great way to prepare for the unexpected. It can help you save money, reduce stress and give you peace of mind knowing that if something unexpected does happen, you have some savings to fall back on. Building an emergency fund starts with budgeting your income each month to make sure you are able to put aside a certain amount from each salary or from other sources of income.

When it comes to deciding how much money should be saved in an emergency fund, it’s important to consider your needs and lifestyle. Generally speaking, financial experts recommend saving at least six months’ worth of living expenses in case of job loss or other major life events. However, depending on factors such as your job security and the amount of debt you have, it may be more or less beneficial to save a different amount.

Once you know how much money should go into your emergency fund each month, it’s important to create a plan and stick with it. Automating payments so that the money is taken out of your salary or bank account before you have time to spend it can make saving easier. By budgeting and setting up a plan to save up for unexpected expenses, you’ll be able to keep track of your finances more easily and have peace of mind knowing that you’re prepared if something goes wrong.

CHECK IF YOU CAN EARN REWARDS ON PURCHASES

If you’re looking for ways to save money when making purchases, then you may want to consider whether your bank offers rewards on purchases made with their debit or credit cards. Increasingly, banks offer some type of reward system that gives customers cashback, points or other types of discounts after they have used their card. Before you can start earning rewards from your bank’s credit and debit cards, it’s important to know what’s available and how the scheme works.

It’s also worth doing some research into different providers so that you can compare the features of each one and decide which one best meets your needs. Once you’ve found the right rewards scheme for your needs, you should be able to sign up online and start enjoying all the benefits it has to offer.

It’s also a good idea to keep an eye on any changes made by your bank as these could affect how much reward you can earn. Many providers offer cashback on certain types of purchases, so it’s worth checking what your bank offers before you make any big purchases to ensure that you’re making the most out of the rewards programme.

Don’t forget, our professional friendly advisers are on hand to support you and can help you explore all of your options.