The short, dark days of winter will soon be behind us because spring is on its way. And with the new season, spring cleaning is in the air. So, don’t forget to include your home finances in that burst of the new broom.
Have you any idea just where your money goes? Unless you’re living perilously close to the edge of debt all the time, you have probably developed at least some spending habits that are just that – habits with little to show for the expenditure or even any sound reason why you continue to spend.
So, take a look at the past year’s bank statements, identify where each payment is going, and clear out those old and no longer useful spending habits.
Standing orders and direct debits
A sure place to start identifying those regular payments which you are making almost in spite of yourself are standing orders and direct debits – often for subscriptions to magazines you no longer bother to read or gym club memberships that fell by the wayside long ago.
Now maybe the time to cancel them all. You can always restart a subscription or membership if the fancy takes you at a later date.
A spring clean means not only taking a cold, hard look at your spending but any savings you have, too. With the Bank of England base rate at a record low (of just 0.1%), attractive rates for your savings are few and far between. Without any recent intervention on your part, your savings might be earning as little as 0.01% - and it’s possible to do much better than that.
Shop around and take a look at suggestions made by the Money Saving Expert to find the most competitive savings rates – the site updates them daily.
The majority of mortgages these days are so-called fixed-rate mortgages. That competitively-priced, fixed-rate mortgage which lets you pay the same amount each month, however, is typically good for only between two and five years.
At the end of the fixed-rate term, your lender will automatically revert your mortgage to its standard variable rate of interest – which may change at any time the lender decides and is usually much more expensive than the fixed-rate deal you previously enjoyed.
If your current fixed-rate deal is coming towards the end, therefore, now is the time to start looking around for alternatives and seriously considering the best options for a remortgage and a fresh, competitive deal.
There’s no question that you need them, you probably take them for granted, and you pay – maybe by direct debit – whatever the bills come to each month.
But that is likely to be a poor way of ensuring that you are getting the most from your utilities or that what you pay represents good value for money.
Whether it’s your gas or electricity, mobile phone deal or broadband provider, there are a number of online comparison websites will help you determine whether you are getting the most appropriate and cost-effective deal – and, if not, the website will help you to switch suppliers.
It’s not only when you are spring cleaning your finances. Monitor the spending on your utilities regularly to ensure you stay up to date with the suppliers offering the best value for money.
Whenever your home insurance is up for renewal, make a mental note now to avoid any automatic renewal of the policy. It might seem the most convenient and hassle-free way of ensuring that your home insurance policy is renewed without your having to think about it – but it could be costing you dearly.
An article by What Mortgage on the 15th of September 2020 reminded readers of studies that have shown the average customer for home insurance is paying as much as £877 a year more than is necessary – around 3% of the household’s total budget – by sticking with the same insurance provider.
When it comes to insurance, in short, loyalty rarely pays. So, take advantage of the annual renewal date to compare what you are paying for what protection you get, shop around, and if there are better deals elsewhere, switch insurers. As a specialist property insurance provider, we can do this on your behalf, so please feel free to contact us.
Spring clean and declutter
Spring cleaning your finances may present the perfect opportunity for a physical decluttering of your home. A good clear-out, ridding yourself of some of the clutter that has built up over the past year or so, can open up and refresh your home.
You might even be able to earn a little extra cash by selling some of the items at your local car boot sale or market – and, if not, there are plenty of charity shops likely to welcome your donation (once they are open after lockdown of course).