FINANCE
Pile on the ££££££s
EXPERT COMMENT With so many savings products on the market, it can be difficult to know which ones will suit your needs the best and what you should consider before making a decision. It’s important to understand what you’re signing up for, so before you start saving, check out your provider’s small-print or key facts document,
It’s coming up to that time of year when we all promise ourselves a New Year makeover – to drink less beer and eat more vegetables, spend more time at the gym and less at the takeaway. This year, for a change, why not focus on your financial health? Kay Hill offers a 10-step plan to pile on the pounds next year!
which should tell you about your rights for cancelling the product and any associated charges that may apply. It’s easy to get embroiled in the latest financial craze or follow in the footsteps of what family or friends are doing, but what’s right for them is almost certainly not right for you. Setting personal goals and objectives puts you in charge of your own financial destiny and you’ll feel
REVIEW YOUR FINANCIAL HEALTH As with any self-improvement resolution, you need to know what you are dealing with before you can make sensible decisions – it’s no use going on a diet if you don’t know your weight or BMI! So, the first job is to work out exactly where you are right at this moment in time. Gather together your current account statements, check the balances in all your savings accounts and ISAs, make a note of the current value of any shares or investments and look at what you owe on credit cards, store cards, loans or overdrafts, plus any tax owed if you are self-employed. Ideally, put all these figures on a spreadsheet or in a notebook so you can revisit it regularly over the year and see if things are getting better or worse.
FOCUS ON THE DEBTS Now take a good look at the debts you have,
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and find out the interest rate you are paying on each. There are some things like student loans that are not usually worth paying off (as they are eventually written off), and interest-free loans for furniture that won’t save you anything by repaying, but others, such as credit card debts, could be racking up 30% interest a year! In addition, reducing your debts will help you pass affordability checks when you look for a mortgage. In general, if you have savings, and they are earning less interest than the rate you are paying on your debts (in the current climate you can take that as a definite), then try to repay what you owe, while holding some back for emergencies.
confident and secure in the savings decisions you’ll have made. Setting short-term, mid-term and long-term financial goals is an important step towards becoming financially secure. If you’re looking to purchase your first home in 12 months’ time, your money will need to be easily accessible and not put into a highrisk investment. For a cash-based product, such as an ISA, make sure you research which provider is offering the best interest rate and at a fixed return.
Will Lenehan,
LOOK AT YOUR OUTGOINGS
Financial
Next turn to your current account. If you’ve ever got to the end of the month and wondered where the money goes, this is the opportunity to find out! Firstly, check to see if there is anything on there that shouldn’t
OpenMoney
Adviser,
First Time Buyer December 2021/January 2022
FTB 84-85 Finance December21-January22.indd 84
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