If you want to get on to the right footing a financial adviser can help – especially when it comes to complex matters like tax. Here are a few things to start thinking about.
1. Simplify your spending
Sit down with your latest bank statement and go through every item of expenditure, including all your Direct Debits and standing orders, and cancel those which are no longer relevant. For example, you may find you are paying for clubs or gyms that you no longer attend, or that you have magazine subscriptions that you could do without.
Similarly, if you have credit cards you no longer use, cut them up to avoid temptation in future and cancel the Direct Debit you have set up for these accounts. By only having essential Direct Debits in place, it will be much easier to monitor your spending, so you know exactly where your money is going each month.
2. Loyalty rarely pays
Go through all the financial products and services that you have and see if your money might be able to work harder for you elsewhere. Could you earn more on your savings, for example, by moving your money to a different account, or save money by switching utility providers?
Similarly, if you have insurance policies which are due for renewal, don't automatically accept the quote offered by your existing insurer. Instead, compare quotes from other providers and see if you can cut costs by buying cover from an alternative company.
If you have a packaged bank account which you are paying a monthly fee for, make sure you are using all the benefits on offer. If you don't, switch to a free account.
3. Only buy essentials
That cappuccino on the way to work might seem essential but cutting out a £2 coffee every working day could save you a massive £440 over 12 months, assuming you work 220 days of the year.
Similarly making a packed lunch can reduce your outgoings by as much as £25 a week if you normally spend around £5 a day buying lunch out.
4. Pay down your debts
Try to clear as many of your outstanding debts as possible, focusing on the ones that charge the highest rates of interest first. Look at ways you might be able to reduce the amount of interest you are paying too.
For example, if you have credit card debts, move them onto a balance transfer credit card offering a lengthy 0% introductory period so that your monthly payments go towards paying off what you owe rather than being swallowed up by interest charges.
5. Don't pay more tax than you need to
The taxman takes enough of our money every year, so make sure you aren't handing over more than you need to. For example, if you are saving regularly, make sure you are using your annual individual savings account (ISA) allowance so that returns are tax-efficient.
This tax year, which ends on 5 April 2017, you can invest up to £15,240 in ISAs; next tax year, which ends on 5 April 2018, this increases to £20,000.
6. Get some expert advice
To get your finances in tip-top condition you might want to consider a few sessions with a financial adviser. Most advisers charge a fee for their advice, but the money you save over the long term could make it more than worthwhile. The ‘find an adviser’ section of our website can put you in touch with professionals in your area.