The following is a guest post contributed by Liz Goldman for Wonga.com – the UK payday loans alternative.
If your finances were out of shape in 2011then this is the year to improve your financial health. Finally the time is here to reduce your credit card bills, slash your mortgage and make sure your savings are sweating interest.
Here is a 2012 personal finance health checklist to ensure your finances run smoothly.
1. Keep Your Vehicle in Good Condition
Taking good care of your car can mean savings of hundreds or even thousands of dollars from maintenance and insurance premiums. Regular servicing of your car’s key parts ensures fewer accidents which in turn leads to lower premiums. You will also save on costly repairs and potentially having to buy a new vehicle, too.
2. A Safe Home
There is an easy way to lower your home insurance costs that is not known to many – just install alarms, window bolts and secure locks and you will probably be offered better home insurance rates.
Do regular safety checks on smoke detectors, locks, wiring and plumbing to avoid costly accidents.
3. Buy Online
You can get some great deals online, so shop regularly at online stores to save money. Items such as books, DVDs, electronics and jewellery can all be bought for less. You will also save on gas and the temptation of eating out. Look for free shipping offers and use price comparison sites for the best possible deal.
4. Improve your Credit Score
Mortgages, credit cards, quick payday loans and personal loans are expensive financial products we all rely on, so improve your credit score and save money with lower rates of interest. Pay bills on time, ensure your credit file is correct and clear any debts. Checking your credit file regularly is a good idea to help remove any errors and get good deals.
5. Identify potential pinch points and plan ahead
It is important to plan ahead to those times in the year when you know finances are likely to be tight – for example birthdays, vacations, weddings and so on. A short-term solution to help improve your finances in these situations might be to use a payday loan provider or to ask a friend to help out.
Make sure you are paying the correct rate of tax and be sure to write off any tax deductible expenses. Contact a professional if you are unsure about any aspect or need assistance with paperwork. Maybe you are paying more taxes than needed and you don’t even know it!
7. Control your “Wants”
It is important to identify your “wants” (things you want to have like a new TV, holiday, Playstation 3) and your actual “needs” (essentials such as food, shelter and clothing). Embrace your finances with a clear and open mind, identify what you really need and budget for any “wants”. If you are finding it hard to be disciplined, open a savings account that can’t be easily accessed and transfer a small amount each month. Pick an expense that you don’t need like going out, and put that money into the account. You’d be amazed how fast it adds up.
8. Don’t Keep Up with the Joneses
Don’t bother trying to impress people by leasing a sports car or buying the latest gizmo. Few people will actually notice. Save the money instead and use what you already have. Remember to bear this Ethel Barrett quote in mind: “We would worry less about what others think of us if we realized how seldom they do.”
Regularly check your savings account against competitor’s interest rates to make sure you are getting the best deal. Research online and use financial product comparison sites to help you. Carefully check your saving account’s terms and conditions for any withdrawal penalties if you choose to switch or close it down.
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