Top tips to get your finances in shape this summer

It is summer, and many of us are concentrating on making the most of it. But we can’t afford to forget about money just because the sun is shining. Here’s our top tips on keeping finances fit and toned.

1. Set up a budget

Do you know exactly how much you have coming in each month? Probably – but do you know exactly where it all goes? Probably not.  Make a log of what, where and when you spend, and you’ll be in a better position to decide how you can trim the excess expenditure.

2. Get out of debt

Debt is toxic, easy to get in to and very hard to get out of.  Paying to fill your car with a mainstream credit card once a month could mean a debt of around £1000 at the end of a year if you only pay the minimum charge each month.  Using any spare cash to pay off debt is a big step to fitter finances.

3. Start saving

With debt out of the way, it’s time to start using the cash you have freed up. Use our online calculator to find the best rate for your savings.

Use our online calculator to find the best rate for your savings.

4. Start an ISA

ISAs are a simple way to protect your savings and investments from tax. Everyone can save up to £20,000 into an ISA per year – with no income tax or capital gains tax. Make it a Stocks and Shares ISA, and you are already an investor rather than simply a saver. Stocks and Shares ISA’s carry a degree of risk as the value of the investment can go down as well as up.

If you have a Cash ISA, you won’t pay any tax on the interest you receive, while for stock market investment ISAs, there’s no capital gains tax to pay when you sell your holdings or on any income you receive.

Investors do not pay any personal tax on income or gains, but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA managers.

5.Start a pension

As of 6 April 2018 the full flat rate state pension is £164.35 a week. This is hardly enough for most people.

If you are an employee, you should be getting more from your workplace pension – but even this may not be enough to provide the kind of income you would want for your old age. Starting a personal pension could be the answer, especially as the taxman will pay in an extra 25p for every £1 you pay into a pension if you are basic rate taxpayer, and even more if you are in a higher tax bracket.

Starting a personal pension could be the answer, especially as the taxman will pay in an extra 25p for every £1 you pay into a pension if you are basic rate taxpayer, and even more if you are in a higher tax bracket.

6.Have a contingency plan

Consider how you would manage in an emergency such as losing your job, or suffering poor health. Having at least six month’s expenditure in cash deposits can be a big help.

There are also various types of insurance policy to consider:

• Income protection – pays a proportion of your salary until you reach retirement, return to work or the policy end date.
• Critical illness insurance – pays a lump sum if you’re diagnosed with a critical medical condition such as cancer.
• Accident, sickness or unemployment insurance – can provide for a specific commitment such as a loan.
• Mortgage protection – ensures your mortgage will be paid off on death.
• Life assurance, also known as ‘Term assurance’ – this simply pays a lump sum on death.
• Family income benefit – this provides a regular payment over a number of years rather than a lump sum. This type of policy can be cheaper than a policy that pays a lump sum.

7. Get professional help

Managing money is complicated, and can be a great deal easier if you can call on professional help. Simply call us at Continuum for the help you need.

Managing money is complicated, and can be a great deal easier if you can call on professional help. Simply call us at Continuum for the help you need.

The value of your pensions and investments and the income they produce can fall as well as rise and you may get back less than you invested.

Levels and basis of reliefs from taxation are subject to change and depend upon your personal circumstances.

There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk.