7 ways to overhaul your finances in 2019

A new year is a great opportunity to get a proper hold on your finances, especially as we’re all feeling the pinch after Christmas. If you’re not sure where to start, we’ve put a list of suggestions together that could make you richer, save you thousands of pounds every year, and give you some much needed peace of mind. Shockingly, most people don’t even know about these options! Credit card companies, gas and electric providers and insurers don’t want you to find out about these tips, because they’ll lose money- but you’ll gain it!  Take back control of your finances with these secret savings. 

1. Wipe credit card debt

Before thinking about starting to spend money, or even save it, it’s important to clear your existing debts. The fact is, one ever means to get into debt, but it happens to many of us, and having huge credit card bills can cause a lot of anxiety. Luckily there are easy ways to pay off your cards and start afresh. Of course, you then have to avoid getting into debt again, but our handy guide to making a budget below should help with that! Here’s a few ways to cut down on your credit card debt;

• Always pay off the card with the highest interest rate first, to ensure you don’t waste your money on paying the interest, and can instead put all of it reducing your debt.
• Take advantage of free balance transfers to shift the amount you owe to a credit card with a lower interest rate, or a new card with a large interest-free period. If your credit score could be better, it’s important to be careful when applying for credit cards, as if it’s too low and you get rejected for a card, this can make your score even worse. There are plenty of free tools like this one that will be able to tell you your likelihood of being accepted.
• Beware of just making minimum payments every month! Try to pay more if you can afford to. Why? Because minimum payments are designed to lock people into long- term debt. The banks benefit from all the interest you rack up.

2. Switch providers

A new year can often start with a host of price hikes on your bills, but did you know that most of us are already overpaying anyway? The fact is, many of us won’t bother shopping around properly for better energy deals, because it sounds a bit too much like hard work. BUT for those who make the effort, the rewards are amazing- you could save over a thousand pounds a year. Join MoneySavingExpert’s Cheap Energy Club, fill in a few details and they’ll do a full market comparison for you to check you’re not overpaying on your current deal. They’ll also constantly monitor your tariff and email you when the time is right to switch. It’s a no brainer.

Next stop is your broadband provider, who unfortunately are probably saving their best deals for brand new customers. Use the broadband unbundled tool to check instantly if you could save with an alternative provider. Don’t fancy switching? you can always try a bit of haggling. Call them up, threaten to leave and see what they offer you! It’s almost guaranteed that they will see what they can do for you. Alternatively, you can try saying a different provider is offering it a cheaper price so you’re going to switch.

3. Ease future financial burden on loved ones

No one likes to think about it, but the earlier you plan for your funeral the better, especially financially.  Would you really want your children to spend their hard-earned money on your burial, rather than putting it towards their own mortgage, or their children’s education? For many, the answer to that is no.

That’s where funeral insurance comes in- an easy way to put a lump sum of money towards your funeral when you pass away, easing the burden on your loved ones at a devastating time. Another thing you really should consider if you haven’t already is writing a will.

Astoundingly, 30 million people in Britain don’t have a will, including more than third of people over 55. Without a will, you cannot protect your money or your family, because your assets will be allocated according to strict rules after your death – so may not go to the people you intend. You will also miss any opportunity to reduce the tax burden on your loved ones. Luckily, all funeral insurance policies come with a free will kit, so you can state exactly where you would like your money to go when you pass away.

4.  Make a budget

Making a budget sounds like hassle, but it’s actually simple if you follow our method. It starts with finding out out exactly what you’re spending money on. You may think you already have a good idea about this, but a lot of us underestimate how much we actually spend– this part may be a little painful! Keep a spending diary for 4 weeks, starting from payday, so you can see where your wages are going. Doing so will help you identify what you are spending the most money on.

Next comes the budget making! You need two columns; one for incomings and one for outgoings. Under incomings, put your take- home salary and any other regular income you receive such as benefits. In the outgoings column, put your fixed costs such as mortgage, rent, council tax, bills, and any insurance payments. Next, add in all your variable expenses (the ones that change month to month). This will be things like groceries, childcare, petrol, entertainment, credit card payments and transport.

Now you have your budget, you’ll be able to see the areas you are spending a lot in, and start to consider where you could make cuts. First, separate ‘wants’ and ‘needs’ in your outgoings. For example, you may categorise broadband as a ‘need’, but a monthly trip to the cinema as a ‘want’. Here it’s easy to see where you could making savings, but be warned, it may be more tricky in other areas!

Once you have gone through all the ‘wants’, have a look at your ‘needs’ to see if you could make any savings in those areas as well. For example, you could do a quick online comparison to see if your energy bills could be made cheaper by switching to a better provider (see above).

5. Start a savings safety net

It’s no secret- life is full of curveballs. That’s why its a smart idea to have a safety net of money saved up for if/ when the next unplanned expense unfortunately comes your way. This saves you a lot of anxiety and financial difficulty. But how exactly can you build up a decent amount of savings when you already have so much to pay for!?

We’ve got you covered.

Apps such as Plum get you saving without even noticing the money leaving your account! How!? Plum works out how much you can afford to save, and moves over small amounts (a couple of pounds) every few days, based on your spending. If you need to access the money at any point you just tell it you’d like to withdraw, and it will move back over to your current account. It really is that simple- users have reported saving £2000 a year without even trying! Click here to get started.

The amount of money you keep in your safety net is up to you, but most people like to have enough to cover at least 3 months bills in the event that your income suddenly stops.

6.  Leave your loved ones a cash gift

By now, you’ve probably realised it pays to prepare for the unexpected. It doesn’t bear thinking about, but if you’ve got loved ones who depend on you financially, then life insurance is absolutely essential for protecting them if anything were to happen to you. What happens to them if you’re gone? Who would scrape together mortgage payments each month?

Unknown to many, UK residents over 50 are actually entitled to special life cover rates. Thanks to new comparison sites that can check your details in a matter of minutes, you don’t even need to get off the sofa to get insured. Premiums start from less than a few pounds week! Click the button below, fill in a 30-second form, and find out your best possible rates.

7. Consider remortgaging

It makes sense that if your mortgage is your single biggest expense, then cutting its costs is going to be your single biggest money saver! Remortgaging can save you hundreds of pounds every year if you have slipped on to your lender’s standard variable rate.

Another great reason to consider remortgaging is to protect yourself from interest rate rises- the Bank of England has raised interest rates twice in the past 12 months, going up to 0.75% in August.

Before you start, explain to your current lender you’re thinking of remortgaging and challenge them to give you a new/better offer- they will want to keep your custom! If you don’t like what they offer, then have a look around for better options.  Use this handy guide to find out if remortgaging is right for you, and what the best deals are.