Think Money: Is It Time For An Annual Review Of Your Finances?
Whether your finances are in a mess, or absolutely perfect, a look back at your finances from the same time last year could offer some insight into areas for improvement, or show you how well you’re doing.
That’s the message from financial solutions company Think Money. It says that whatever shape your finances are in, there is always something that can be learned by looking backwards. Regarding your finances, it recommends looking back over the last 12 months.
Identify areas of overspending
A recent study by insurance provider Bright Grey indicates one in ten people said they spend more than their monthly salary on a regular basis. Financial problems like this don’t usually happen overnight – sometimes life sends adversity your way, sometimes people get into bad habits with money.
Whatever the reason, when you compare your finances now with one year ago, you might be able to identify the financial habits you should keep, and the habits you should leave in the past.
Two good habits recommended by Think Money are to sign up for online or phone banking to facilitate managing your money, or take advantage of text services provided by some banks that will inform you if you’re approaching your overdraft.
People living beyond their salary every month are at risk of growing a large pile of debt that could take months, or even years to repay – especially when you consider that the average household debt (excluding mortgages) was £7,984 in December last year. So, when looking back to last year’s bank statements, budget plans, invoices and bills, look at any debt you may have and ask whether it has grown or shrunk since then.
If it’s grown, what were you doing differently back then? Were your debts smaller, did you have fewer, or were you better able to manage your finances back then? It could be that curtailing your spending in a few areas could bring you back on track, or it could be more serious. You won’t really know until you ask the question.
The advice to anyone with debt problems is to seek advice from a debt expert as soon as possible, so that you can find a way of budgeting and debt management that suits you.