Financial Health Check: Money saving tips to start 2021 on the right foot

If you are looking to start the year right with money saving tips for 2021, we have put together this simple guide to help you.

2020 brought financial challenges for many people, so this January is the perfect time to review your finances and plan the year ahead to get you where you want to be. Whether you are hoping to buy your first home, move home or simply start your savings journey for the future, this guide will offer some useful advice.

Contact us

Let Linear Financial Solutions help you

At Linear Financial Solutions, our advisers take pride in helping people with their personal financial journey. Contact us today and we’ll put you in touch with a Linear adviser.

Contact us

Step 1: Check your credit report

Your credit report will give a good overview of where you are now. It will also show you any potential issues that may cause problems in the year ahead.

A credit report helps lenders make a decision on you. They need to be confident that you pose no risk of missing repayments, so a credit report helps to show how you have managed your commitments over the past six years. It details everything in your debt history including credit cards, loans, overdrafts, utilities and phone bills.

Other areas that will make your credit profile look more attractive to lenders in 2021 include:

  • Making sure you are on the electoral roll
  • Disassociating yourself from an ex-partner (or any person you may have shared a joint account with in the past) as their credit score can affect yours
  • Check for errors on your credit file and flag any up for correction with your creditors
  • Strike a balance between available credit and debt

Read our full guide on improving your chances of getting a mortgage here.

personal planner and pink flowers in a vase on a wooden table

Step 2: Create a financial calendar so you don’t miss any important dates

Make a list of all your debts (including credit cards, store cards, loans, buy-now-pay-later, your mortgage … etc.!) and your insurances (including life, income, illness, home, contents, car, phone, pet, boiler … etc.!) and mark all the dates when your deals or loan terms run out, or when policies need reviewing or renewing.

Your personal finance

Make sure you know exactly where you are in terms of repaying your personal debt such as credit cards and purchase finance. You should be consistently paying these off on a monthly basis.

If you made a purchase last year with a buy-now-pay-later (BNPL) deal, check you are on track to pay off the debt before the term ends. It is easy and can be costly to convert these to regular payments, instead of repaying them, especially with 0% interest store cards. Many BNPL providers will charge overly high interest rates once the term ends, so don’t get caught out by having to pay any more than the purchase cost – or, consider alternative lower cost finance to repay balances.

Likewise, ensure you know exactly when any 0% credit card deals end. For example, you may have taken out a credit card in the recent past with 12 or 18-months 0% interest on purchases. Make sure you know exactly when that term ends so you know how long you have left to clear the debt before interest starts being charged.

Your mortgage and insurance

Your financial calendar should always mark up the important dates related to your mortgage and insurance.

Here are the crucial dates you will need to know, if applicable:

  • When any mortgage rate deal ends
  • The date your early repayment charge period ends (if different)
  • When your insurance products need reviewing and renewing

Step 3: Find an independent mortgage and financial adviser

Using an independent adviser can help you take all the right steps long before you are actually ready to commit to the financial arrangements that you may need. Planning ahead with a professional adviser by your side can help you make the right choices and get the right outcomes at the right time without unnecessary hassle – and without putting yourself under pressure to sort something quickly because you have left things a little late!

A Linear Financial Adviser can help you stay on the right path, making sure you are always ready for the journey ahead. Our advisers take pride in going above and beyond to make sure you have the knowledge and confidence to move forward with your financial arrangements with their help.

woman placing a takeaway carton in a brown paper bag

Step 4: Cut out any expensive lockdown habits

With shops and restaurants closed across the UK during the pandemic, many people have turned to online shopping and buying regular takeaways instead of eating out. We all like to treat ourselves now and again … however making a list of all non-essential spending can help you work out your regular savings potential.

If you spend £20+ a week on takeaways, that equates to at least £1,040 a year. Planning your weekly meals and only buying what you need when you go to the supermarket (or order your food shop online) may help reduce costs significantly and save you money.

There have also been reports over the past few months of people increasing their alcohol intake and smoking/vaping habits because of lockdown. Now may be the perfect time to re-set your healthy lifestyle and focus on body, mind and wallet!

With shops closed, it’s easy to get carried away with online shopping. Shop with a meal plan and a list, keep a log of all your purchases and set a realistic budget to stick to.

Lockdown money saving tips

  • Swap to supermarket own-brands … you might be pleasantly surprised!
  • Watch your alcohol intake!
  • Compare your food shop online across the stores
  • Check out Loyalty Cards for value
  • Swap a weekly takeaway for home cooking
  • Use buy, swap and sell sites for clothes and other goods
  • De-clutter your home and sell any unwanted items

Step 5: Optimise your savings potential

Take a look around the market for the best cash savings accounts. ISAs help you save free of tax up to an allowed level, as ever with some offers better than others. It is best to shop around and check the best interest rates and access terms to suit your needs.

There are also intelligent banking and savings apps which work alongside your current accounts. App based accounts such as Monzo or Stirling allow you to round up your spending to the nearest pound and deposit the difference in your savings account.

Talk to a Linear Adviser to plan out your budget and help you to consider your short-medium term aims and how much you can afford to save regularly towards these.

Your property may be repossessed if you do not keep up payments on your mortgage.

Linear charge a non-refundable mortgage arrangement fee of between £399 and £999 when an application is submitted to a mortgage lender for you. Your adviser will agree the arrangement fee with you before commencing any chargeable work. The actual amount payable will take account of your financial circumstances, the complexity of borrowing requirements and the amount of work required to fulfil your needs.