Ahead of the New Year, the BBA has put together a list of five top tips to keep your finances in good health in 2016.
Anthony Browne, Chief Executive of the BBA, said: “The start of 2016 is a great time to make sure you are on top of your finances. Sometimes even the most disciplined of us enter the New Year with a financial hangover but with careful planning you can boost your chances of staying out of the red.
“Banks are constantly innovating to create new services and products that can best help people manage their money. There has never been a better time to give yourself a financial MOT so that you’re fully prepared for the year ahead.”
- Prepare for a rate rise
Many experts expect 2016 to be the year when interest rates finally start going up a little. The future is difficult to predict but rates haven’t increased for almost a decade so it’s worth thinking about whether you are prepared if repayments on borrowings like your mortgage start to rise. Consider how you might accommodate a rate rise and factor it into your budgeting. Many banks offer a mortgage repayments calculator that can help you plan ahead.
2. Manage your money on the move
Do you struggle to find time to check your balance? Some banks offer text and e-mail services to help you keep an eye on your account while on the move. Signing up to these services will let your bank warn you before you slip into the red. More people are also going online to manage their finances quickly, securely and easily at the touch of a button. Research from CACI for the BBA showed that customers used mobile devices to check their current accounts 895 million times in 2015, more than twice as many times as they interacted with their bank at a branch (427 million).
3. Create a ‘rainy day’ fund
Many of us will remember our parents telling us the importance of saving for the future. It’s easy to forget this wise advice, however, in the rush of everyday life. Setting aside a few pounds each month can stand you in good stead if the unexpected happens. That way you won’t have to rely on your overdraft if the boiler or car breaks down.
4. Pay by Direct Debit
It only takes a few minutes to set up a Direct Debit and it can lead to significant savings. Paying your regular bills by Direct Debit allows you to spread costs over an extended period and some businesses even offer discounts for you paying by this method. Importantly, Direct Debits come with a guarantee so you’re automatically protected.
- Shop around
Banks compete for your business every day so keep an eye out for the best deals. The Current Account Switch Service moves all your regular debits and credits for you so that, if you do fancy trying a new bank, you can do it quickly and easily. More than two million people have switched since the service began in 2013.