Spring clean your finances

Don't worry, you won't be needing these to clean up your finances. Image: go_greener_oz
"It can be easier to get on top of your finances if your payments are on time. If you’re prone to the odd forgetful moment then think about setting up direct debits"
  • | by Abbie Laughton-Coles

As the sun finally makes an appearance for the first time this year and the daffodils get ready to go into full bloom, it can only mean one thing: spring has sprung.

But don't reach for the mop and put down the duster just yet. This March, why not consider tackling your finances first?

Budget, budget, budget

Budget - Images_of_money

Image: Images_of_money

Yes, it’s a bit boring but it really is one of the best ways of getting on top of your incomings and outgoings. By actually writing it down you can then spot where to make savings.

Shelling out £40 a month on takeaways? Try making your own version of your favourite dishes at home. Do you have mountains of clothes piling up but still can’t help buying more? Hold an epic sorting session to see what you already have hidden at the back of your wardrobe.

It doesn’t have to be an all-singing, all-dancing budget either - a simple one will do. A number of the high street banks will have a downloadable template to help get you started.

0% balance transfer cards

Isa - Images_of_Money

Image: Images_of_money

If you already have existing debt, think about taking advantage of a 0% balance transfer card. Some cards offer an interest-free period or low interest rate for a set period of time which can be up to 31 months. You will have to pay a fee for transferring balances to your new card, which will generally be around 3% of your total. Make sure you factor this into the cost when considering switching.

However, using a balance transfer card will only work if you're able to pay off your debt before the introductory interest period ends, otherwise you may end up paying a higher interest rate.

You could consider switching your balance to a credit card which has permanent low terms rather than a card with a limited 0% period if you aren't confident of paying it off in time.

Get rid of cards that you don’t use

Cards you don't use - Sean MacEntee

Image: Sean MacEntree

We all do it, keep cards that we don’t use, filling up vital slots in our wallet. The thing is that the redundant credit cards sandwiched between your library pass and Nando’s loyalty card (one more stamp for a free chicken!) could actually be harming your credit rating.

Indeed, the more credit cards you have but don’t use, the more chance you have of being rejected should you apply for another. Plus, you could have a higher risk of becoming a victim of identity theft.

Switch current accounts

Image of piggy bank - Images_of_money

Image: Images_of_money

Have you had the same current account since you were 16? Well, don’t you think it might be time for a change? Sure your account may have comfort and familiarity that you enjoy, like a comfy pair of pyjamas you’ve had for years, but you may very well have outgrown it.

Now the current account switch guarantee has come into play, it really is easier than ever to change. You could potentially be sitting pretty with a more appealing interest rate and extra benefits to boot.

Improve your credit rating

Credit rating - Napinterrupted

Image: Napinterrupted

If your credit rating isn’t looking too healthy, fear not. There are steps you can take to get it back up to fighting-fit form.

Make sure you’re on the electoral register and fix any mistakes that are on your credit report. Also cancel any credit cards that you don’t use - it may be satisfying to cut up your card, but that doesn’t actually close the account.

If you have consistently been declined credit, stop applying! This can really harm your credit score, so until you know the reason you’re being refused, step away from the application form.

Also consider a credit building card which could help to build up or repair a poor credit score. Be aware that it will have a high interest rate and that - if you don't pay off the full balance each month - you could fall further into debt.

Start looking for the perfect holiday

Holiday - Ian A Kirk

Image: Ian A Kirk

In the immortal words of lyrical wizard Madonna: “Holiday, celebrate, holiday, celebrate.” And she does have a point.

It’s that time of year where we start to think longingly of our potential summer escapades, bookmarking our favourite destinations and worrying about wearing a swimsuit.

However, booking over two months in advance could save you a tidy sum as flight prices tend to increase after this point. So book earlier for more margaritas on the beach! Conversely, you could leave it until the last minute - here's how to do it.

Set up direct debits

Direct debits - HowardLake

Image: HowardLake

It can be easier to get on top of your finances if your payments are on time. If you’re prone to the odd forgetful moment then think about setting up direct debits.

No more late payments means no more late fees to pay, helping you to keep your cash for the important things, like extra lives on Candy Crush.

Shop around on your bills

Shopping around - Polycart

Image: Polycart

Every month we celebrate the arrival of wages into our account and then slowly weep as we see large chunks disappear almost instantly for rent or mortgage payments, energy bills, insurance… the list goes on.

So why not soften the blow a little by making sure that you really are getting the best deal possible on your outgoings? Don’t just settle for what you already have when it’s so simple to shop around and switch providers. And you can compare practically everything nowadays, from pet insurance to broadband packages.