Lots of people worry about managing their money, or may be uncertain about whether they’re on the best deal, but there are ways to boost your money confidence.
Rising household costs, fears that you’re not getting a good return on savings, or that you’re paying too much for your borrowing and other outgoings can all weigh heavy on our minds.
Being concerned about your finances isn’t a bad thing, especially if it encourages you to take action. Becoming money confident can start with something as simple as checking your bank statements properly, if you don’t already do this, starting to save (or saving more) or getting more for the money you spend. Here’s what you need to know.
Set some financial goals
A good starting point if you’re looking to become more confident about managing your money is to set some financial goals.
These can include short-term goals, so the things you hope to achieve in the next few months, such as saving for a holiday, or trying to pay down credit card debt. Medium term goals may be things like saving towards your children’s university education, making home improvements, whilst longer term goals might include reviewing your pension to ensure you’re on track for retirement (more about this later).
Try to make sure the goals you set for yourself are achievable. If they aren’t, failing to reach them could knock your confidence further, so only focus on things that you’re confident you will be able to do. Find out more in our guide How setting a savings goal can help you reach it.
Reduce your outgoings
If the financial goals you’ve set currently feel unattainable, it’s time to work out what steps you can take to make them reachable.
This is where sitting down with your bank statements can really help, as it’ll give you a clear idea of where your money is going each month. Make sure everything you’re forking out for is necessary. Our article Are you losing money on subscriptions you don’t need? may help you whittle down some of those Direct Debits and standing orders you have coming out of your account each month.
Once you’ve got rid of any unnecessary expenses, you can start looking at ways you might be able to spend a bit less every month. Check out our guide How to save money – 18 money saving tips for ways you might be able to trim your bills.
Get a better deal on your mortgage
As mentioned, reducing your outgoings can really help boost your money confidence, so it usually makes sense to start with what’s likely to be your biggest one – your mortgage.
Switching to a better mortgage deal shouldn’t be just about going for the cheapest option. The new deal must be right for you, otherwise the savings will be meaningless.
If you’re remortgaging, the best remortgage deals with the lowest headline rates often come with large upfront fees. But the bigger the mortgage you have, the more likely it is that you’ll be better off going for the lowest interest rate and paying higher fees.
Don’t be put off reviewing your mortgage because of the number of deals there are to choose from. If you’re not fully confident going it alone, you might want to seek professional help
Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for expert mortgage advice, you can speak to an independent mortgage broker with Unbiased. Every advisor you find through Unbiased will be FCA-regulated, qualified and unconnected to product providers – so they can offer you truly unbiased advice.
If you still aren’t sure whether mortgage advice is right for you, read our article Should I get advice on my mortgage? to find out more.
Find a cheaper credit card
Reducing your credit card spending can help you feel more confident, so check how much interest you’re paying and see if you can move any existing balances to a cheaper deal. Always compare deal at least two different price comparison sites, as some have exclusive deals with providers, so you may get a better rate or price.
The good news is that some areas of finance are much more competitive now than they were a few years ago. For example, you can now get a credit card with a 0% balance transfer period of 34 months, compared to 15 months a few years ago.
If you’re switching to a new 0% balance transfer credit card: don’t just go for the longest deal but work out how long it would take you to pay off the debt if you don’t have to pay interest. Compare the longest lasting 0% balance transfer deals, but make sure you take the balance transfer fee into account as well.
If you don’t need nearly three years to pay off your debt, there’s no point in paying a higher balance transfer fee to get the longest lasting deal.
Review your retirement savings
Not knowing where your retirement savings are invested or whether you’re on track to be able to afford the lifestyle you want when you stop work can damage your confidence and leave you feeling uncertain about the future.
Think about how much you’re currently saving into your pension, and whether you might be able to boost the amount you’re putting away. If you’re not sure how much you should be saving, read our guide How much should I save for retirement? Remember, it’s vital to keep a cash buffer readily available in case of emergencies, as you won’t be able to access your pension savings until at least the age of 55. Find out more about how to do this in our article How to build an emergency fund.
When it comes to where your pension is invested, your pension provider will usually offer you a choice of cautious, balanced or more adventurous options, so you should be able to find a fund which matches your appetite for risk. Remember to take charges into account, as the higher they are, the more they’ll eat into your investment returns. You can find out more in our articles Where is my pension invested? and What pension charges am I paying?
If you want personal recommendations about where to invest your retirement savings, or to you’ll need to seek professional financial advice. You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guides on How to find the right financial advisor for you or How to get advice on your pension.
If you’re considering getting professional financial advice, Unbiased is offering Rest Less members a free pension review. It’s a chance to have a qualified independent financial advisor (IFA) take a look at your pension arrangements and give an unbiased assessment of your retirement savings.
The review is free and without obligation, but if the IFA feels you’d benefit from paid financial advice, they’ll go over how that works and the charges involved.