In times of uncertainty, it’s easy to feel that we have no control over the future.
Future-proofing your finances can help you feel more secure about what lies ahead – whether that’s preparing for big life milestones, such as starting a family, or navigating difficult periods, such as unemployment or poor health.
One of the effective ways to do so is by taking control of your money; from tracking spending to paying off debts and managing bills, there’s a lot to consider.
Not sure where to start? We have put together seven practical tips to help you get on top of your finances.
1. Make a budget
The most important step on this journey is the easiest: make a budget.
It doesn’t matter whether you use an Excel sheet, a budget planning tool such as The Money Advice Service’s free digital planner or note it down with pen and paper – so long as you try your best to stick to it.
Give yourself challenges, like a no-spend week, and consider getting different bank accounts or pots where you can keep money for different expenses.
2. Keep track of spending
You can’t follow a budget without tracking your spending.
Thankfully, there are money management apps that can do it all for you and even sync up to bank accounts to monitor changes in real-time.
If you prefer a traditional approach, try Plum. The app rounds up spare change from purchases into a savings account, lets you set a percentage limit on how much to save and shows bills in detail.
For something quirkier, give Cleo a go. This app is engaging and educational. It helps by giving advice, answering questions and it even offers the chance to win money through quizzes and games.
3. Don’t let debts pile up
Most people have some form of debt and that’s okay, but don’t let them get out of hand.
If you’re considering taking out a loan in the near future, ask yourself the following questions: Do I need an unsecured (personal) or secured (homeowner) loan? Will it impact my credit score? What is the repayment term and interest rate?
If you already have a high-interest loan on a credit card, consider swapping to a 0% balance transfer credit card.
This way, you can ‘pay off’ the debt with the new card and by doing so, cut down the interest rate.
4. Invest in property
Property is almost always considered a good investment – but choose with care, or your forever home could become an expensive nightmare.
The first step is getting a mortgage. Chat to a broker, review mortgage rates on comparison sites and take your time.
Then research insurance options to protect your home and assets. If it’s an older property, you might also want boiler cover. If it’s a new build, there’s special insurance available.
First-time buyers keen to take part in the Government’s Help To Buy scheme will also need to move fast, as this ends on 31 March 2021 and will be replaced by a different scheme.
5. Swap providers to reduce bills
From phone to broadband, electric to gas, most of us have a bad habit of sticking with our original provider.
Even if you’re happy with your current set-up, we highly recommend that you do a bit of browsing to see what’s out there.
For example, if you’re not bothered about having the latest phone model, a SIM-only deal could be cheaper than tying yourself into a lengthy (and pricey) contract.
Similarly, if your broadband term is coming to an end, ask your provider if they have any special deals going. Then call other providers and see what they will offer.
Finally, pin them against each other and watch as each company tries to win your business with discounts and benefits.
6. Look after your health
It’s never been more important to have a plan for sickness. While it sounds a bit doom and gloom, having a process in place could offer peace of mind.
If you’re self-employed or have no protections beyond Statutory Sick Pay (£98.85 per week), consider getting accident, sickness or unemployment cover for an alternative income, should the worst happen.
There are other types of income protection plans too, such as permanent health or life insurance.
7. Don’t forget the pets
Lockdown has seen a steep rise in pet ownership. Got yourself a dog or a cat? That’s fantastic news – but don’t forget to look after it.
Pet insurance is a must, as something as basic as your furry friend developing a skin allergy could set you back an average of £701 for treatment, according to Tesco Bank.
Some packages also include advertising fees or reward money should your pet go missing, as well as boarding fees, should you not be able to take care of the animal (such as if you were in hospital for a lengthy period).
Make small changes for the future now and you’ll thank yourself later.