New habits can be tough to implement, but if you keep practising these, your financial health will thank you for it.
1. Check your accounts regularly
Keeping an eye on your accounts will help you spot anything that’s not right. Should there be something you don’t recognise such as double payments or unnecessary direct debits, you can sort them out. Aim to check once a week and if there's anything you're not sure of, get in touch with your bank straight away.
2. Start saving, no matter how little
Get into the habit of saving some money every month. Even if it’s just a couple of pounds, it all adds up. See if your bank has a ‘save the change’ scheme. This is when payments are rounded up to the nearest pound and put aside. For example, if you spend £2.50 on a coffee, then 50p will go straight into a separate pot. Monzo and Revolut both offer this feature, as well as banks such as Lloyds, TSB, and Halifax. If this isn’t an option, you could save your loose change by putting it into a jar.
3. Set up direct debits
Missing any payments, will harm your credit score and leave a mark on your file. Avoid this by setting up direct debits. If you prefer to stay in control of when money comes out of your account, put a reminder in your calendar so you don’t forget when they’re due. You won’t even have to think about it because they’ll automatically go through, and it’ll show creditors that you’re responsible with your cash.
4. Practice smart shopping
Try finding the best deals before you buy anything. This could be for your car insurance, a new gadget or your food shopping. For any online shopping, look for a discount code or buy it through a site that offers you cashback such as Quidco or TopCashback. Read more about using cashback sites here.
For food shopping, join a loyalty scheme. For example, you could order a Tesco Clubcard and use it whenever you shop at Tesco. You’re not limited to one loyalty scheme so you could sign up to as many as you like and bank your points for the future.
5. Be strict with your spending
As tempting as it may be to pay for something on a credit card or with a loan, ask yourself if you need it first.
If you can't afford it, don't buy it. It's better to wait until your financial position improves or else you'll spread yourself too thin. If you have a lot of bills to pay or can't afford them at all, it could become very stressful to manage and potentially land you in debt.
6. Stick to your budget
If you’re spending more than you earn each month, then you’ll struggle to save. Take action by reviewing your income and outgoings. You should set yourself a spending cap for things like food shopping and non-essentials. Tactics like making a shopping list and unsubscribing from marketing emails will help you make sure you only get what you need.
One way you could budget is by tracking just these three categories.
7. Consolidate your debt
If you’ve got several credit cards or loans it might be worth seeing if you can save on interest by transferring them to one card or loan. If you consolidate them, you’ll have one monthly bill to pay off rather than multiple, which will make it much easier to manage. If you're transferring to a card, you'll need to make sure you pay it on time every month. Remember, there's usually a fee involved in transferring your debt as well.
8. Start reading your bills
Read your bill statements carefully when they come through. Make sure you know what you’re being billed for as well. It could be that your energy tariff increased and you didn't notice. Perhaps you were charged an add-on for your mobile phone by mistake. Checking your bill regularly will highlight any issues or inaccuracies.
Read on for 21 quick ways to increase your credit score.
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