When many people think of ways to improve their finances, most think of things that will take years to accomplish. To most, it will go somewhat in this order – save for retirement, buy a home, paying cash for a car etc. And when they think of these things, they begin to get frustrated and lose motivation because of the long time horizon. If you are one of these people, then read on.
Whilst the area of personal finance does include many big long-term goals such as the ones mentioned above, there are also countless short-term goals, activities and decisions that will help you with your finances. Many people have this thought that because they are small, they don’t matter. But in reality, it’s quite the opposite – the small changes make your big financial goals possible. With this in mind, here are 10 quick things you can do to improve your finances.
1) Switch Banks
If your bank is charging you high fees or is paying you a paltry interest rate, switch banks as you’re losing money. It takes less than an hour to search for decent alternatives online. My recommendation would be to move to Santander who pay an interest rate of 3% on balances above £300 or Halifax who pay you £100 for switching to them and £5 a month if you meet certain criteria.
2) Open a Savings Account and Fund it using a standing order
If you have a savings account, you’ve already done 50% of the job. For those that don’t, find an account that offers good rates and open one. Savings account are for anyone who has saved up more than 5 month wages (emergency fund) and want a better return on their money. Once you have a savings account opened, set up a standing order from your current account so money automatically goes to your savings every month. Saving this way will ensure you save every month and if you do it on the same day you receive your monthly pay-check, it will be even more effortless as chances are that you won’t miss what you haven’t seen.
3) Comparison Shop Your Insurance
Make sure you search for insurance online at least once a year. It will take up a an hour of your time and you will have to make a few phone calls, but trust me it’s worth it. It will surprise you how much you can save on car and home insurance by just shopping around and bargaining on the phone.
4) Lower Your Monthly Bills
Following on from the insurance example above, reduce other bills. There are a whole range of other bills you can chop down on from your phone plan to your gas and electric bill without compromising on quality ad service by simply shopping around calling up to bargain. This is especially true with mobile phone operators. If you are aware of a better offer from a competitor, mention it. Your provider in most cases will match it. If they won’t match, switch to the competition – loyalty is a thing of the past.
5) Lower Your Bill Some More.
Comb through your bills and look for things you don’t use (or use enough to justify the cost) like premium channel packages, insurance/protection plans you don’t need, unlimited texting or data, subscriptions to papers/magazines you don’t read, and so on. If you’re not using it or getting your money’s worth, drop it.
Another way to lower your bill some more is to make sure you are getting the best possible price. Some comparison websites don’t offer the best prices for certain sings such as gas and electric. A recent report published by the BBC found that websites like money saving supermarket hide the best deals. A website I would recommend to help you slash electricity and gas prices is the Big Deal. The website uses collective bargaining to set a price that is most beneficial for all that sign up.
6) Find Your Biggest Money Drain and Plug It.
Ever wondered where all your money goes? Sit down with your bills and statements and figure out where your money is going. This will help you analyse what exactly it is you are spending your money on and it will give you a clearer picture on what you need to do in order to save money on a monthly basis. The most common drain on finances is eating out a lot, entertaining too much, shopping too often when you don’t need anything and spending countless £ at Starbucks. Knowing exactly what your biggest financial drain is will help you in 2 ways especially you’ve got debt, firstly it will stop you from purchasing impulse buys thus you are not racking up more debt and secondly the monthly savings you make can be used to pay off your existing debt.
7) Reduce Your Credit Card Interest Rate.
The number one enemy of personal finance is credit card debt. But if you already have this debts and your bills are racking up, here is a way to save on your bills. Call your card issuer and ask (politely) for a reduced rate. If you are a good customer and in good standing, you can probably get the rate reduced. If the first rep won’t help you, ask for a supervisor.
8) Comparison Shop Credit Cards.
ONLY if the above didn’t work. There are atoms of credit cards out there, with many offering 0% or super-low interest offers on balance transfers. Check creditcards.com for a list of cards that match the criteria you want, find your new card, and transfer your balance. Using this method will save you a lot of money from interest charges.
9) Learn One Thing about your finances you don’t understand
It’s amazing what you can learn in an hour with a quick search online or a trip to the library. Find something about your finances that you don’t understand and read about it to figure it out. Maybe you want to know what an ETF is or whether or not you need life insurance. Maybe you don’t understand how credit card interest is calculated. Learn it – simple. The internet is a treasure trove of information and make sure you use it to your advantage, The more you know, the better you become at making good decisions and managing your finances effectively.
10) Set up a SIPP (Self Investment Pension Plan)
You keep saying that you’ll get around to doing it, but never do. You’ll end up waking up one day one day and realize that the days were slow but the years were fast. You’ll be on the cusp of retirement and having no contingency plan in place. Start investing in a SIPP, or any kind of pension online. The sooner you start investing, the greater your return will be through compound returns. A SIPP can be opened in less than an hour and good platforms that offer cheap DIY SIPP investing include Hargreaves Lansdown, Best Invest and AJ Bell YouInvest.
As you have seen, not every task that improves your finances takes years to accomplish. There is plenty you can do to improve short finances in under an hour. Knowing that these small activities will help you achieve bigger financial goals will help spur you on and which hopefully will lead to your financial freedom somewhere along the line.