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5 ways to review your finances in the New Year

reduce mortgage payments

December can hit our wallets hard with all the Christmas spending, so January is always a good time to review your finances, ensuring that your goals are still relevant and any existing policies you have are still suitable for you and your family’s needs.

Review your overall goals

The New Year is an ideal time to look at what your financial goals are, both short-term and long-term.  In the long-term you may want to think about retirement or saving for your forever home. Short-term goals may be saving for a holiday or looking at your Christmas budget. 

Look at how much money is required for each goal so you can plan around this.

Save more

Saving isn’t easy when we have so many other outgoings to think of.  But can you review your spending to see if you can cut back?  Having a savings buffer in place can be crucial when an emergency hits from a car breakdown to being made redundant from work. 

Whilst interest rates remain low, the return on savings isn’t great at the moment however you can maximise your tax-free savings with an ISA. Your maximum allowance for 2020/21 is £20,000.

Clean up your direct debits

When you review your finances to see where you can save money, it’s also a good idea to have a good spring clean of your finances.  Go through your bank accounts – do you have old accounts that are lying dormant that could be closed?  Do you have direct debits that are no longer in use?  Streamlining your accounts can make things clearer and simpler to keep track of.  Opportunities to save or any anomalies in your account will be easier to see. 

Revisit your mortgage

If you currently have a mortgage, then it’s likely that this is your biggest outgoing.  But with interest rates could you save money?  If your fixed rate deal is coming to an end in 2021 or you are on a variable rate and free to switch, then why not speak to a mortgage broker and find out what current deals are out there.  If you’d review your finances like car or home insurance annually to make sure you’re getting the best deal, so why not review your mortgage too?

Protect your family’s future

If this year has shown us anything, it’s that we never know what is around the corner.  But we can prepare for certain eventualities.  If you don’t already have protection insurance in place, then why not use the New Year to look at the possibilities.  Life Insurance is perhaps the most common policy to have.  This gives you a safety net for your family should the worst happen.  However, income protection insurance could also prove useful if you were unable to work through illness or injury.  Work out your requirements, how much cover will you require, then speak to a protection specialist to find the best policy to suit your needs.

The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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