Spring brings along with it a lot to be thankful for – the longer, lighter nights as you leave work to sun rather than darkness, sunny weekends to get out and about with the family to enjoy picnics in the park or a stroll along the beach, and the motivation to do a big old Spring clean of the house.
If you’ve already started the Spring clean of your house, or you’re partial to doing them annually, you’ll know the benefits of a declutter.
Spring is a great time to declutter your finances too, especially with the new tax year starting if you’re self-employed, the rising energy costs that we’re facing in April and the government budget having just been released.
We could all do with tightening our belts a little as we enter the next few months, and there are some easy ways to do just that.
Here’s how we’re getting our financial habits squeaky clean this Spring:
1) Take a look at your spending habitsWe’re all guilty of spending more money than necessary in certain areas, but identifying the key offenders is the first step to making a change.
Either use your banking app, download a PDF of your statement, or look at the spending categories that are now offered within the apps and identify the areas outside your rent/mortgage and household bills.
You could realise that you’re spending a lot more than you thought on different categories, such as online shopping, eating out or groceries. If there are areas such as buying clothes and shoes or spending more than you thought when you’re out socialising, look at these as areas to make improvements and start cutting back.
Identifying these habits and working on changing them could see you saving hundreds of pounds without even realising.
It’s also worth looking through your statements to check that you’re not paying for any subscriptions or memberships that you’ve completely forgotten about, for example music or TV streaming services that you don’t use. Cancelling these can all add up too.
2) Unsubscribe from sales emailsIf you’re an impulsive spender, try spring cleaning your inbox this month! If you’re trying to cut back on your spending by identifying areas that you waste money on, you might be an impulsive spender when it comes to sales and shopping.
We’ve all been there – good intentions to save money this month, when an email lands in your inbox offering 20% off for the next two hours. It’s too much of a good deal to pass on, so you make an impulse purchase after a quick browse, resulting in more damage to the bank account.
If you really want something, it’s worth waiting for a discount but don’t be lured into buying for no reason.
You’ll feel much better having a clean inbox with things you are genuinely interested in.
3) Simplify your direct debitsComplicated finances can make you feel stressed when you have no idea what’s been paid and what’s due to come out of your bank account. Making sure everything that you pay is done by direct debit on a date close after your payday.
That way, you don’t have to remember to pay your bills when they’re due, and you know where your outgoings are month by month.
It’s also a good idea to set up a standing order to automate your savings if you put away so much each month to go towards holidays or events.
It’s also worth looking around at apps available that save for you. There are some that round up your spending to the nearest point and filter it into an account automatically. It can be a great way of saving without noticing the impact.
4) Protect your income should anything happen to youThere are so many reasons why you may find yourself unable to work, and it’s a good idea to have a fallback in place, especially with the cost of living rising so much at the minute.
There are two products that are worth looking into if this is something you think you may benefit from. Critical Illness Cover is one of those products that most people think that they either can’t afford or will never need.
Unfortunately, the reality is that we are far more likely to claim on a Critical Illness Cover policy than we are on a Life Insurance policy. Critical Illness Cover protects against accident and injury, serious illness or if you become permanently disabled. It can be taken out with life insurance cover or bought on its own. If you need to claim against it, it pays out a tax-free lump sum or an income when you need it most.
Some policies can also pay out if your children get seriously ill and you need to take time off work to care for them, so if you do have a family, it’s worth exploring your options. The majority of Critical Illness Cover policies will provide cover against:
Plans can cover many more medical conditions, as well as provide cover tailored to your kids.
You might come across a policy that will cover ten or twenty main illnesses whereas other policies may cover 100s. That is why it’s good to use a specialised broker like The Insurance Surgery to find you the policy that is best for you.
The other option is Income Protection, which may be considered for anyone who works full time and is self employed or works as a contractor. In this scenario, you do not have the same access to sick pay as those who are employed, and therefore do not have any rights or benefits if you were to be signed off on long-term sick.
Income Protection Insurance is designed to pay up to 70% of a working individual’s annual pre-tax income as a tax-free monthly benefit should they be off work due to illness or injury. There is no restriction as to what illness or injury you can claim on, as long as it’s not a pre-existing issue. You can choose how long you want to wait before the benefit is paid, something that is referred to as a “deferred period” which can vary from 1 day, right up to 52 weeks.
Each year, there are thousands of people in the UK who find themselves unable to work due to injury or serious illness – and yet many people don’t consider what would happen if they were suddenly unable to bring in money each month.
If this is something that worries you, we can help. You can contact The Insurance Surgery here.
5) Review your billsWith the energy crisis and the cost of living rising, now is a great time to start thinking about reviewing your bills. Reviewing your bills to make sure you’re getting the best deal is a great way to save money and spring clean your finances.
Switching and comparison sites can help you identify the company that may be best for you based on your usage. With things how they are at the minute, experts have suggested sticking with your current energy provider to get the best possible price for you, however that doesn’t mean you need to stick with providers for other services such as car insurance, home insurance and life insurance.
If you think you should be reviewing your life insurance policy, The Insurance Surgery can help. If your circumstances have changed such as your occupation or salary, your medical conditions or if you’ve bought a house, then it might be a good idea to review the cover you have in place.
Changes in your lifestyle can impact the amount of life insurance you might need. Subsequently, it could also change the price that you pay every month. You can find out more information about reviewing your life insurance policy here.
It’s also worth delving deeper into your bank accounts and making sure you’re not paying for services that come as benefits with your bank or elsewhere. Lots of bank accounts come with mobile phone insurance or home insurance as part of the sign up perks, which you may not have known about. You could be duplicating your outgoings without even realising.
It’s also an idea to use the opportunity to look at your pension contributions and ISA statements. These are often the areas that gather dust and are all over the place in separate pots. Spring is a great time to do this and to see whether you can afford to make any last-minute contributions within your annual allowances.
If your fixed term mortgage is coming to an end, now is also a good time to look at remortgaging and getting a better interest rate!
6) Always Plan AheadIf the last two years have taught us anything, it’s that you can never predict what will happen weeks, months or years from now. Thinking about the money you’ll need for each season and planning accordingly will help you manage your finances a lot easier.
We’ve put together a checklist of recurring costs that you can use as a starting point and add to, to help you plan your finances for the year to come.
- MOT due
- Car insurance up for renewal
- Car tax due
- New tax year
- School holidays
- Summer breaks
- Weddings / Christenings / Other celebrations
Put a Spring in your stepSpring cleaning your finances can make you feel so much better about your bank account and your financial situation. Planning ahead for you and your family is always a great idea, whether you’re saving to go on holiday, buy a new house or you want to put money away for your children.
One way to ensure your family are looked after even if you’re not around is to take out a life insurance policy.
At The Insurance Surgery, we work with all the major insurance providers to find you a policy that suits you and your circumstances. Whether you have a pre-existing medical condition, have a dangerous occupation or partake in hazardous hobbies, we can help. Contact us today via our online quote form here.