Spring is a season of renewal. As temperatures warm and days grow longer, Britons turn their attention to home DIY projects, gardens, and outdoor recreation opportunities. According to financial professionals, spring is also a good time to take stock of investments and savings, and to review other financial matters.
BBC News recently polled experts, asking financial bloggers and other industry professionals to provide recommendations for improving personal finances this spring. Some of their suggestions are featured here, as well as additional things to consider as you address money matters in the coming months.
Adjust Your Pension Saving Plan
Workers in the UK frequently settle-in to default pension contribution levels. However, it may be possible to grow your pension pot a little faster, by upping your contributions and taking full advantage of your employer match. As part of your springtime financial review, check whether you can improve pension planning by earning a higher match. If your employer allows it, paying pension contributions by salary sacrifice might help you save on National Insurance contributions.
To work out the best pension approach for your lifestyle, get a quotation of what you can expect to receive from your pension by the time you reach retirement age. If you’re like many pension savers, the figure might not hold up to your retirement finance expectations. If you feel as though you’re not putting by enough for retirement, use your spring review to identify ways to improve your outlook. Consider possibilities such as working longer, saving at a faster rate, and downsizing your house to free-up financial resources.
Assess Debts and Investments
Most experts recommend prioritising debt repayment, such as paying off high-interest credit card balances first. To avoid building an unsustainable level of debt, you should try not to carry over high credit balances from month to month. Unfortunately, facing inflation and stalled wage growth, many UK consumers struggle with rising credit card debt, unable to find the financial momentum to wipe their card balances.
Alternative financing is available, without formal credit checks, but credit cards’ convenience and revolving repayment schedules continue to lure borrowers. If you’re employed and need fast cash, but don’t want to add to your credit card balance, short-term lending alternatives can save you money, when compared to the cost of prolonged credit card interest payments. Multiple providers are prepared to extend favorable terms, in exchange for guaranteed repayment on or before your next payday.
If you’re fortunate enough to cover monthly outgoings and still have money left over for saving, establishing a direct deposit adds discipline that can help you pace regular deposits. Start by sending the money to a cash account, and once you’ve put by a substantial sum, invest the money in stocks and bonds. As you examine your finances this spring, consult with your financial advisor to ensure your money is allocated properly between various types of investments. And review the charges you pay professionals to administer your investment accounts.
Get Your House in Order
Spring is a good time to get your financial house in order. It is also the best time of year to turn your attention to your property. Getting your house in order, both figuratively and literally, will keep you moving in the right direction during summer months, when holiday travel and family activities distract you from keeping up with your finances.
Do you have unwanted clutter around the house? If so, turn it into cash by selling unneeded possessions at online auctions sites. Have you fallen behind balancing your accounts and reviewing your finances? Take the time this spring to evaluate your banking and borrowing habits. Adjusting your mortgage, for example, can help you lock favorable house loan terms before a base rate hike drives up mortgage interest rates. Is your energy spending through the roof? For lower costs next winter, invest in insulating your house and sealing cold air breaches this spring. These are only a few of the spring strategies you can use to improve your finances this season.
Despite your best efforts to manage every aspect of your finances, it’s easy to lose your grip on money matters. The spring change of seasons provides an opportunity to review your financial status and make healthy adjustments to your pension plan, retirement investments, and household spending habits.