Financially fit for 2015
In the New Year, we often look for ways to improve our health and wellbeing, but have you ever considered your financial fitness? This pain free process could have you gaining pounds in no time. Our top tips below will guide you through the process:
1.Work out your finances
Do you know what you spend your money on? Sounds an easy question doesn’t it? But could you put a figure on your monthly outgoings for everything - food, fuel, travel, insurances, savings, childcare, clothes, lunch, the coffee you buy on the way to work, your daily newspaper etc?
Sit down and take a realistic look at everything you spend, and if you’re not sure where your money is going, keep a ‘spend diary’ where you can make a note of what you’re spending over a month. To know what your true outgoings are is the most important step towards becoming financially fit.
2.Trim the fat
Once you know what you spend your money on, the first step is to cut out the things that you really don’t need. For example, if you’re paying for subscriptions for anything that you don’t use - magazines, TV packages, music or even the gym - cancel them. You can always start them again later if you change your mind.
The same goes for insurances. Only take out what you need; for example, your home insurance may cover loss or damage to your mobile phone, and so you may not need an extra policy.
Just ring your current provider to chat through the terms of your policy. This may also prove useful for the next step to achieving financial fitness.
3.Exercise your right to the best deal
Are you getting the best deal on the monthly expenses - your car and home insurance, TV, phone, internet and utility bills, for example? We often fall into a habit of renewing our accounts every year with our current suppliers, especially if we have no reason to complain about the service. However, if we’re not shopping around, we are not aware of better, cheaper deals in the market. This could be costing you hundreds of pounds a year.
If you are not on a fixed term contract (in which case, you may incur exit fees to switch early), then shopping around could give your financial fitness an immediate boost.
You can find information about how to switch providers of energy, TV, phone and internet on the Citizens Advice Bureau website. You can also check different providers and how much they cost via online comparison websites.
4.Make existing providers work harder
You may decide to keep some of your existing providers after following the steps above, in which case, make sure that you are in the most suitable deal for you. For example, ring your energy supplier to check if you are on the cheapest tariff, or your mobile phone provider to see what your average usage is and how it compares to the minutes and texts you pay for. Remember that you are a valued customer and the company will want to keep you, so these conversations may result in you being offered a better deal.
5.Cut down on habitual spending
Take a look at what you spend out of habit, and work out how much it will cost you per year - the large figure may surprise you. This isn’t about not treating yourself, but rather about understanding exactly how much your habits are costing you and making a decision from there. For example, a £2.50 daily coffee will cost you £632.50 over the course of a working year, so it may be worth looking into a cheaper alternative.
6.Don’t lose the pounds you gain
The best way to keep the pounds you gain is to pay them into an existing savings account or set up a new one; that way you will earn a return on your savings, and make them work even harder. This does not necessarily mean that you won’t have access to your money - Al Rayan Bank has a range of savings accounts, from instant access, to notice accounts and fixed term deposits, plus notice and instant access cash ISAs.
To find out more about Al Rayan Bank's savings accounts, and which one would best suit your needs, please click here or call our Customer Services team on 0800 4086 407.