Melanie Wright
AUTHOR Melanie Wright| CREATED 18 Jan 2016
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How to simplify your financial life

Streamline and gain control of your money in three easy steps.

With most of us juggling so many different things, it can be easy to push sorting out your finances down the priority list. But by making a few simple changes, you can make it much easier to stay in control of your money – and to ensure that it is working as hard as possible for you.

The first step to simplifying your financial life is to break it down into areas, so that you can focus on one goal at a time. Here, we look at three of the most important areas to tackle, so that you can get back on the right track to managing your finances more effectively.

Savings

Sit down and write a list of all the savings accounts you have. If you've got more than a couple, then it can be much harder to keep track of how much interest you are earning, so think about consolidating your savings.

Philippa Gee, managing director of independent financial advisers Philippa Gee Wealth Management, said: 'The ideal is to use one company for as many of your financial products as possible, providing the deals are good. So instead of three different savings accounts, merge them into one and try to use that higher amount to get a better interest rate.'

However, bear in mind that you don't want to hold more than £75,000 with any one institution. This is the amount which is protected by the Financial Services Compensation Scheme in the event of your bank or building society going bust. The limit is applied 'per individual, per bank', so if you hold any more than £75,000 with any savings provider, it won't all be protected.

Debts

If your wallet is bulging with credit cards and you don't know how much interest you are being charged, your best option may be to consider moving the balances held on these cards onto a balance transfer card which offers a 0% introductory rate for several months.

This will give you the opportunity to pay down what you owe without being hit by steep interest charges. Make sure you don't use the card for new spending however, as you will be charged interest on any purchases made. You should also try to pay the balance off during the 0% rate period.

If you have both loans and credit cards, then you could consider consolidating them using a low cost loan. Ms Gee said: 'You should only do this if it means you can negotiate a lower interest rate and you totally agree to focus on reducing the debts and absolutely not taking on any more. If you do debt consolidation and then take on even more debt you are going to get yourself in a bigger mess, so be realistic.'

Investments

Write down all the investments you have and check how each is performing. If you find it hard to keep track of them all, then consider consolidating them with one company, such as an investment platform.

Ms Gee said: 'Using an investment platform is a great way to simplify matters because you can hold a variety of investments in one place, which cuts down on paperwork, should make the assets cheaper and simply produces one tax document each year. It also really helps reduce the headaches with monitoring, so you can log on at any time and see how the whole amount is doing, as well as individual holdings.'

If you really want to simplify matters and are fed up with looking after everything yourself, speak to your adviser about how they can help you. If you don’t have an adviser and would like to find one in your area, check out our Find an Adviser tool and visit Advice Matters for everything you need to know.

 

Melanie Wright

Financial journalist Freelance

Melanie Wright is an award-winning freelance financial journalist, and former Deputy Editor of the Daily Telegraph's Your Money section. She contributes regularly to the Sunday Times, Daily Telegraph, Times and Observer, and wrote the Sunday Mirror's Money pages for more than a decade. She is also a regular commentator on television and radio, having been interviewed on BBC Breakfast, BBC News Channel, Channel Five News, ITN News, GMTV and LBC Radio.