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With the New Year in full swing, it\u2019s a time when a lot of people are aiming for resets in their life whether it be financially, mentally or physically. Tackling your finances can be a challenging task, but a fresh year can be a great time to get on top of them.<\/p>\n
We spoke with head of money at personal finance app Plum, Rajan Lakhani, to explain the importance of having a financial reset and some simple ways to do it.<\/p>\n
\u201cHaving a financial reset is an opportunity where if you haven\u2019t been managing your finances in a way that you would have wanted to, you can actually start again and start putting into place the behaviours and actions that will then put you in a much stronger position moving forward,\u201d Lakhani explains.<\/p>\n
\u201cThe New Year can sometimes provide optimism and a new approach. It\u2019s an opportunity for people to know there are ways out.\u201d<\/p>\n
Check your balance<\/p>\n
Lakhani says the most important thing whenever people are doing a financial reset is actually knowing where they stand and getting an overview of their finances. \u201cThat begins with looking at your bank account and seeing what money you\u2019ve got,\u201d he says. \u201cCheck your savings account and see how much money is put aside. Also check any debts you may have and check this against what you are spending on a regular basis.<\/p>\n
\u201cA lot of this information will be available through your bank statements. Another quick way of doing this is connecting your bank account to a financial app and then you can look at what you\u2019re spending on. Then from having that overview, you know where you stand and you can begin to take the right actions.\u201d<\/p>\n
\u201cThe key thing with this point is not to be fearful because knowledge is power.\u201d<\/p>\n
Look at the payments you are making<\/p>\n
\u201cAnother key thing to do is check and consider what subscriptions you have,\u201d Lakhani says. \u201cWhen it comes to streaming for example, it\u2019s challenging now because there are so many organisations, so it\u2019s really important to work out what streaming platform you\u2019re actually using on a regular basis.<\/p>\n
\u201cThere are some that you might have forgotten. The government did some research that found that the cost of forgotten subscriptions is \u00a31.6 billion a year. Another one that comes up quite often at the start is the year is when people join the gym and then after a few months, they might start not going regularly but are still paying for the subscription.\u201d<\/p>\n
Check what payment plans you\u2019re on<\/p>\n
\u201cYou can also check if you are on the right payment plans,\u201d Lakhani adds. \u201cFor example, Netflix<\/a> and Spotify have different plan options, some of which come with adverts. Some want you to pay the extra money to avoid the ads but you need to ask yourself if that will help you with your finances moving forward.<\/p>\n Get a free fractional share worth up to \u00a3100. Terms and conditions apply.<\/p>\n<\/p>\n
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