We’re far enough into 2016 now for the resolution-breaking weeks to be behind us. New Year’s Eve is just a distant memory and it’s time to start seriously looking at the year ahead. For many of us, it’s our finances that could do with some serious attention this year – sorting out money matters is at the top of the agenda for many people. 2016 is a great year to start winning with your cash – here’s why (and how).
You can start saving to buy a home
In December the government introduced the new Help to Buy ISA, a scheme designed to get anyone looking to plant a foot on the housing ladder to start saving. You also get the added boost of a 25% top up from the government. So, for every £100 that you put into the ISA the government will add another £25 – plus the ISA is a tax free form of savings. You can deposit a lump sum of up to £1,200 into the ISA in the first month and then £200 a month after that with the maximum government bonus available being £3,000. The ISA is available per person, not per household so if there’s two of you buying together the potential government bonus is £6,000.
Technology is making budgeting easier
It has never been a better time to get help with your budgeting, there are simply no more excuses for not setting, and sticking to, a monthly plan. There are budgeting apps available for your smart phone, as well as numerous guides online to help you work out how to stay within your means. Your friendly local bank also offers a range of tools to help keep your finances in check, from budget planners through to savings calculators that will help you work out how to meet savings goals.
Interest rates are not going up (yet)
There’s been talk for some time that an interest rate rise is imminent but this month the governor of the Bank of England said that there was no need for any rate increase as the UK economy has slowed and growth globally is weak. This isn’t great news in terms of the rates of interest you’ll receive on savings but for anyone with a mortgage – or any other type of loan or debt with an interest rate linked to the Bank of England Base Rate, it’s welcome news indeed.
You can automate yourself into good habits
Many of our issues with finances tend to come from ‘human error.’ That could be simply forgetting to pay a bill on time or failing to put anything aside for your savings and then having nothing in the pot at the end of the year. With direct debits and standing orders, as well as the availability of different savings accounts, you can set up automatic payments that will ensure your money is being properly managed without you going anywhere near it. Agreeing to direct debits to pay your bills often means receiving a discount in return and you’ll have the peace of mind of knowing that you’re not going to see any red letters land on the doormat. Some banks now offer cash back if you pay your household bills from their accounts by direct debit – for example Natwest offers 3%.
Credit reports are free
Do you know what your credit score is? Well if you’re serious about managing your finances then you should. You can see your credit score for free via Experian or Equifax – this will show you how creditworthy you are, whether there are any issues that need to be dealt with to correct your credit record now, and will also give you good perspective on whether you’re living with a good balance of debt.
Switching is simple
If you’re stuck with a bad loan or credit card then it’s so much easier now to make the switch to an arrangement that better suits your finances and your income arrangements. 0% credit cards are an easy way to give yourself more space to start reducing debts – you won’t pay any interest on a balance you transfer for a set period of time and you can use that cash to start reducing what you owe. If you’re finding yourself stuck with a loan you can’t manage or a debt you want to handle differently then it’s very simple to move to another finance option, whether that’s a payday loan or a revolving credit facility, to help you get your finances back in order.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley