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New Year's financial guide
As 2012 starts and the UK economy keeps on suffering from the effects of the ongoing Eurozone crisis (as well as our own problems), it's no great surprise to hear warnings from the OECD and the IPPR about falling back into recession.
What normally matters most to us as individuals is how our own situation will be affected - and what we can do to improve the health of our finances. All the more reason to review your finances at the start of this New Year…
Budget: taking stock
First of all, take stock. How much money do you have coming in every month? How much are you spending? What's it going on?
Understanding where you stand financially is an essential part of bringing some more order to your finances, so it's well worth taking the time to sit down with a budget planner to help you make sure you've not forgotten any of your income or expenditure.
Debts: dealing with the past
The New Year's traditionally seen as a time for new beginnings, but life doesn't 'reset' on 1st January! If you've borrowed any significant amount of money, paying it back is likely to play a major part in the financial decisions you make this year.
If you're on top of what you owe but finding it awkward to keep up with multiple payments every month, have you considered a debt consolidation loan? You could use it to pay off all your debts at once, so you're left with just the consolidation loan to repay. If you're thinking of doing this, make sure you arrange monthly repayments that aren't too low (or you'll pay more interest than necessary, since it'll take you longer) or too high (or you might not be able to make them every month).
If you're not on top of what you owe, this is something that needs to be addressed. If you've realised you can't afford your monthly payments, what can you afford? Can you realistically expect to repay what you owe in a reasonable time? Your lenders might accept a new agreement called a debt management plan, in which they'd agree to lower monthly payments to help you make sure you can repay the money. Paying it back more slowly can cost more in the long run (again, due to interest) and can affect your credit rating - but if you can't afford your original payments, this could still be the best approach to take.
Saving: preparing for the future
Whether you're looking to buy something big, preparing for retirement, or keen to stay out of debt in the future, saving is a great way to prepare for the life ahead of you - not just 2012, but the rest of your life.
Of course, your financial situation might be very different this time next year, so it makes sense to figure out what you can afford to save this year.
So, once you know where you stand with your monthly finances, ask yourself whether (and how) you want to save this year. Some people find it helps to stick to a regular saving commitment, while others are happier putting aside whatever they can afford each month. Others simply can't afford it - it's great to save for the future, but if the money's not available, saving it won't be an option.
Having said that, there are ways of making money available. If you're looking for ways to cut back on your spending and make your money go further, these money-saving tips might be useful.
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.