Mrs Moneypenny (Channel 4’s Superscrimpers) is writing a series of blog posts for us, all about making better financial decisions in 2015. @mrsmoneypennyft
It was my birthday recently, and the bulbs I planted in the autumn have produced a beautiful set of colourful flowers to greet me in my garden. It’s that time of year when I want to shake off the winter blues and make everything clean and tidy, and not just in the garden and the house.
How long is it since you took some time out to spring clean your finances? Before you can do this, you need to assemble a list of all the bank accounts, building society accounts, credit cards and loan and mortgages you have so that you can decide what to tidy up and how. I always counsel people to buy a notebook, put all their information in it and then spend an hour a week with that notebook and an internet connection to help them get their finances in shape.
Having lots of open current accounts can affect your Experian Credit Score, let alone being an added headache to stay on top of. You may well want to bank with more than one bank, but if you have several accounts that are still open with very little use and a tiny balance, then you may want to consider shutting them down and keeping just one or two to use regularly.
Equally, are you paying a monthly fee for your account? If so, you might be able to get cheaper banking elsewhere. Look at a money comparison websites for information, such as this one.
Do you have several credit cards and store cards? Make a list, together with the outstanding balance and interest rate you are paying. Many credit cards offer an introductory rate that is very low and occasionally zero, and I find people take them up and then forget when the rate runs out and a new, much higher, rate starts to apply. It may be beneficial to get rid of the balance on your higher interest credit cards, and indeed get rid of them altogether. You may well be able to move the balance to a card with lower interest. Before you do so (and not after you have been rejected, which is what most people seem to do) I suggest you go and look at your credit report.
Be warned: moving to a 0% interest card, even if you qualify for one, may not be your cheapest option, because there is usually a transfer fee. Sometimes it is better to move fee-free to what is known as a life-of-balance card, so called because they offer a low interest rate which lasts until the transferred balance is cleared in full. It’s worth comparing the options to help you see which is the right choice for you.
How about odd amounts of stocks and shares? Many of us end up with very small parcels of shares (as a result of a company dividing itself in two, or selling itself to a bigger company or an overseas company) that would cost more to sell that we would get in proceeds. When this happens to me I have a clear out and do what thousands of other people do, which is donate them to ShareGift.
Finally, this is a good time of the year to look at all your insurance products. Are you overpaying for the insurance products you use – and do you even know what you are paying for all of them? I have pet insurance (two Labradors), car insurance (me, my husband, our eldest son), life insurance (on my life to provide protection for my family) and house/contents insurance. With a dedicated amount of time and access to the internet I know I could identify cheaper versions of all these insurance products, and intend to start now. Could you? I shall be buying myself a birthday present with the money I save!