Money Insider: Get back to basics if you want to sort out your finances

 

Many people will have made a new year resolution to sort out their money matters – it's probably among the top three 2012 promises, alongside losing a weight and doing a bit more exercise.

With the Christmas credit-card statements set to hit the doormat in the next few weeks, at the same time as the big winter gas and electricity bills, it's not surprising that people are concerned about getting their finances back on track at this time of year.

But getting to grips with your finances isn't a five-minute job and requires plenty of self-discipline, as well as being prepared to be ruthless and accepting a little discomfort along the way.

Just telling yourself you need to be better with your money and a bit more careful with your spending won't be enough to turn your fortunes around and rid you of that overdraft; it's all about going back to basics and adopting a new mindset and a structured plan.

The first step is to look at exactly where your money goes, so you'll need to take a look at your last three months' bank and credit-card statements. Write out a monthly budget and list everything you currently pay out.

Don't forget to include a contribution to those annual bills such as the MOT for the car, holidays, birthdays and Christmas.

Once you've got the list in place, you should look at each item in turn and ask yourself two questions: can I manage without it, and can I reduce the amount I'm paying?

For some items such as gym membership, dental insurance and magazine subscriptions, it could be as simple as cancelling your standing order. At the other end of the scale, however, when it comes to things like council tax, there's nothing you can do to cut the cost.

But in terms of your mortgage, gas, electric, water, telephone and broadband payments, you should look at ways of reducing your costs, either by switching provider, changing your tariff or in some instances trying to cut down on your consumption.

Another exercise that is essential if you are to improve your financial well-being is to identify where your cash goes. While your list of outgoings details your standing orders and debit and credit-card payments, it doesn't show where that £50 or £100 from the ATM is being spent.

Carry a notebook with you or use your smartphone to record everything you spend. It's a real eye-opener and can help you identify where you can cut back and make some quick savings.

Only when you've got a grip on where your money goes can you start to improve matters by using the cash you've freed up to start repaying your most expensive debts.

It's not a five-minute job, and a financial makeover requires a concerted effort and some will-power, but much like losing weight or getting fitter, the effort will be well worth it in the long run.

Surprise gift for Co-op customers

It has been a predictable start to the New Year with high street banks displaying January Sale posters in their windows in a bid to lure new customers and meet the 2012 targets sent down from head office.

It's all very well going all out to win new business, but what's on offer for the millions of existing customers who've remained loyal for years? As usual, absolutely zilch!

Fortunately, not all financial providers are the same, so it's refreshing to see the Co-operative Bank giving something back to its customers.

Any Co-operative Bank customer with an agreed overdraft limit won't have to pay interest on their borrowing for the first three months of this year. The post-Christmas period is a financial struggle for many people, so this gesture will be warmly welcomed, more so because it has come out of the blue.

The amount of money saved by Co-op customers isn't going to be life-changing, but the fact it shows it cares will pay dividends in the long run as people will feel valued and be far less likely to switch to a rival bank.

A customer with a £2,000 overdrawn balance will save £74 over the next three months while someone borrowing £800 will be almost £30 better off under the terms of this interest-free deal.

There's always plenty of competition and financial incentives on the table for new customers, but keeping people on board for the long term is important too, so well done to Co-operative Bank for daring to be different and giving something back.

Andrew Hagger – Moneynet.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drink
News
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas