A workout for your finances

January is here and across the country gyms will be filling up with people trying to kick-start their New Year’s resolution to get fit.

While not everyone will still be hitting the cross trainer hard come February, trying to get yourself into shape to look after your health is an admirable goal. In fact, it’s probably one to apply to all parts of your life, including your finances.

In June, MoneySuperMarket revealed that 37% of Brits have had credit card debt for up to ten years[1]. Meanwhile, the Money Charity claims that at the end of September 2016, people in the UK owed £1.503 trillion – up an extra £1036.58 per adult from 2015[2].

With this in mind, perhaps it’s time to spend some energy getting financially fit in 2017? And to help, here’s a simply workout routine for your money.

Warmup: Take stock of your finances

Before you can do anything, you need to understand your financial position. Log into your Noddle account and check out your credit score and report. Look to see what credit you have left to pay back and to who, if you have any debt and if all your details are correct.

It pays to spend some time flexing your financial muscles getting your credit profile into a good position, because this is essentially your core strength when it comes to working out the rest of your finances. For example, you may want a credit card to consolidate debt into one card or move to a better rate of borrowing so you’ll need a good credit report to increase your chances of being approved by lenders.

Exercise 1: Paying bills

Paying bills is like your cardio, because it’s a staple activity that everyone needs to do to stay financially healthy. Make a list of everyone you have to pay, such as your mortgage lender, gas and electricity, broadband etc etc, and tally up how much you need to spend each month. It’s worth asking yourself if you can save any money here, before you start budgeting. Once you know your final outgoings, make sure this money is put aside each month to cover these essentials. Some people have a separate account for bills, so they have peace of mind that there is money there to cover them and they won’t accidentally spend it on something else. Find a trick that works for you and allows you to make your monthly payments.

Exercise 2: Trim down your borrowing

Once you’ve covered your living costs, it’s time to focus on clearing any outstanding debt, whether it’s good or bad. Look at how much you owe lenders and at what rate. If you’re paying lots of interest, it might be worth investigating a balance transfer card. These cards usually have an introductory 0% offer, meaning that as long as you pay the minimum amount each month, you could benefit from paying no interest for a set period of time. Try our Cards Matcher service to see which ones you might be eligible for based on your credit profile. Simply login to Noddle to find out more.

It’s always best to pay back more than the minimum repayment amount on things like credit cards, if you can, so see how much you can afford to pay back each month. If you’re struggling to pay back what you’ve borrowed, make sure you at cover the minimum repayment amount at least.

Exercise 3: Build up your financial strength

No work out is complete without a spot of weight training to build up your strength and increase the impact of your gym session. In the world of finance, credit building is your weight training, because it helps you build a strong credit profile, which in turn allows you to more, such as apply for a mortgage, take out a credit card or buy a new car on finance. To find out how to improve your credit score and report, check out ‘The what’s what of credit building’ and ‘6 top tips for a healthier credit report’.

Cool down: Create positive financial habits

To make sure you stay financially fit, you need to create good habits that will help you manage your money. Top among them should be regularly checking your credit report. This allows you to see important information about your accounts, as well as check for fraud by making sure there aren’t any searches on your credit report you don’t recognise. Noddle will send you reminder emails to log-in, so use them to make sure you stay on top of things. It’s also important to track your outgoings and set a realistic budget to make sure you’re financially able to do everything you need to. By creating habits such as these, you’ll be able to use your money smartly and hopefully avoid getting into unmanageable debt.

Here’s to a financially savvy 2017! Keep up the good money habits and follow a workout routine for your finances to keep your financial matters in check.

[1] Opinium Research carried out an online poll of 2,006 British adults from 14th to 17th June 2016 on behalf of MoneySuperMarket. Results have been weighted to nationally representative criteria.

[2] http://themoneycharity.org.uk/money-statistics/