New year, new you: resolve to get your finances in order
For most of us, the New Year heralds plans to get fit, eat better and generally be a better human. But have you thought about what you could do to improve your finances in 2020?
For most of us the New Year heralds plans to get fit, eat better and generally be a better human. But have you thought about what you could do to improve your finances in 2020? There are a several simple steps that could make you significantly better off next New Year’s Eve.
Firstly, this is a good time to reassess your investment portfolio. Gauge whether the spread between different asset classes still suits your appetite for risk and the time you intend to be invested. “The asset classes you choose to invest in will ultimately determine how your portfolio performs, usually more so than the specific investments you choose,” as Andy Bell, chief executive of AJ Bell, told the Daily Mail.
While you are at it check what fees you are paying; these can greatly reduce long-term returns. You may be able to save thousands by the time you retire by switching to a cheaper investment platform, in which case it “would be daft not to do it”, says Tony Hazell in the Daily Mail.
When it comes to your household finances, plan to tackle one bill at a time. “Millions of people have lapsed from their initial-offer rates onto standard rate for all manner of bills, from electricity and gas to TV services and the gym,” says Kate Hughes in The Independent. “Pick one bill each month and cut the cost.”
Your mortgage is likely to be your biggest monthly expense so take strides towards paying it off. Plunging interest rates mean “now is the time to strike to knock years off your home loan term or save thousands in interest”, says Jessie Hewitson in The Sunday Times. Find out what interest rate you are currently paying and whether you would pay any charges to switch now. Then look to see if you could get a lower-rate deal. If you can get a lower rate – which you probably can in the current market – switch, but keep your mortgage repayments the same. Moving from a rate of 4.24% to 1.39% but keeping your repayments the same would allow you to shave seven years off a £150,000 mortgage, saving £8,871 in interest, according to Hewitson.
Finally, keep an eye on your credit-card statements. “It’s so easy to sign up for things on trial, then forget to cancel,” Sir Steve Webb, director of policy at Royal London, told the Daily Mail. Check your spending, cancel any subscriptions you no longer use and raise any suspicious activity with your card provider.