Every woman should carry out annual financial checks. It's important for us all to look at our personal finances regularly, and check that everything is sound. Money doesn't take care of itself. Our situation can change from one year to the next, and failing to make the relevant adjustments can be a costly mistake. Here are the annual financial checks you shouldn't neglect …
1. Budget & Outgoings
The first of the annual financial checks you should make is to review your budget and outgoings. Look at where your money is going, and if you are making any unnecessary payments, such as an insurance policy you no longer need. There may be areas where you can cut down your spending and divert the excess into a savings account.
2. Insurance Policies
Check also that you have adequate insurance to cover your needs. If you have a family, you should ensure that they will be taken care of if you die (this is not morbid, but a sensible precaution). Could you survive financially if you were unable to work? Don't rely on the State to take care of you. Also check that you have enough home insurance to cover your valuables.
3. Savings Rates
Banks are notorious for only offering the best rates to new customers, as they want to get their business. If they've already got yours, they don't have to make an effort. So look around every year to see where the best rates are, and move your account if you can get a better deal elsewhere.
4. Your Mortgage
Every year, you should take a close look at your mortgage. How much you have paid off? How much is outstanding? You may be able to switch to a better rate if you are not locked into a deal. If you are in a fixed-rate deal that is coming to an end, start looking around to see if you can get another good deal. If you have spare cash, it is also worth working out how much you can put towards overpaying your mortgage. This can save you a lot of money over the term of the loan.
It's also wise to look at your pension situation. Are you entitled to an employer match? If you are, your employer will match your contributions, which can boost your pension pot considerably. And it's never too early to start thinking about starting a pension (again, don't rely on the State to look after you).
If you have any debts, focus on them as well. Which is costing you the highest amount in interest? Pay that one off as quickly as you can, so that you can turn to the next one. If you have a lot of debt, seeing how much you have paid off over the last year can be very encouraging in your quest to rid yourself of what you owe.
7. Your Will
You mean you don't have one? If you own property, have savings, or have a family, making a will is essential if you want to ensure that your wishes are carried out after your death. If you do have a will, is it still valid? Changes in your life such as getting married or having a baby mean that you should look at your will and check that it is still up-to-date.
Checking your finances may not seem the most exciting thing to do, but it's essential to look at your money and make sure that your financial situation is sound. Don't be too lazy or hide behind the excuse that you don't understand money. Educate yourself, or you could make mistakes that will cost you dearly. What's the best lesson anyone taught you about money?