Seven financial resolutions for 2007

By MoneyhighStreet Staff. Published on January 8, 2007 This post currently has no comments.

Underground train

A New Year and a fresh start – sometimes it can be difficult to know
where to begin. If you are thinking that you would like to get your
finances in order this year, here are 7 steps that could help you to
achieve your goals in 2007.

Step 1: Finding out what you owe…

Before you can start to improve your financial position you will need to have a
good understanding of what you owe. The best place to start is your
personal credit report. This is the history of your credit - such as
loans, mortgages, and credit cards. This also includes your repayment
record, including any missed payments, defaults, and county court
judgments against you.

It provides an instant picture of your current status and how well you
are coping with what you have borrowed– this can act as a
valuable wake-up call if you have been at all avoiding your debts.

Step 2: Getting organised…

Check all the statements from your bank and building society accounts, loans,
and credit cards so you can see where your money goes and where you
might be able use it better. File them all properly and ensure that
every month there are no double or missed payments.

Always make sure you pay all of your bills on time, and continue to file
them properly, it’s much easier to get caught up and forget to
pay a bill if you haven’t filed them away properly.

Step 3: Setting a target…

Now you know where you stand, it is time to start thinking carefully about
where you want to be and plan how you’re going to get there.
Without winning the lottery, it is unlikely that you will end the
year 100% debt-free and be the proud owner of a fantastic new home,
so be realistic. For instance, you may wish to reduce the amount you
owe on your credit cards or begin saving for a new family car.

Keep on top of things and review your plan periodically to check how well you
are doing.

Step 4: Getting the most of your credit report…

Lenders will almost always check your credit report when you apply for any
mortgage, loan, or credit card. These days many other forms of credit
also come married with a credit check; such as mobile phone
contracts, catalogues, cable subscription etc. Your credit report
will show if you can make regular repayments and if you’re at
overstretched. Lenders are more likely to offer you a better deal if
your credit report is in good shape, so it pays to tidy up your
report and check it on a regular basis.

Make sure that your report is up to date and accurately represents your current
circumstances. You can always make a query on anything you disagree
with or add a note of explanation if exceptional circumstances, such
as sickness or an accident, resulted in temporary financial problems.

Step 5: Not paying too much interest…

Borrowing isn’t at any fixed price, so always check the amount of
interest that you’re paying on loans, cards, and mortgages etc.
It may be well worth actively seeking out new deals. For instance,
switching your credit card balance to a card that offers a 12-month
interest free period, or consolidating several debts into a single,
cheaper loan with less interest, can save you a lot of money over the
course of a year.

When you are seeking out new lenders, be sure to always ask for a quotation
only. If not, they may think that you are making a full application
and subsequently leave potentially damaging credit application
searches on your credit report. These credit searches known as
‘footprints’, may give lenders the impression that you’re
desperate for money or perhaps that you are planning a fraud, and
that almost certainly won’t improve your chances of getting a
good deal.

Step 6: Changing your habits

You are likely to be surprised by how much money you can save by making
slight adjustments to your everyday habits. For example: Having free
coffee from the office machine, instead of spending over £1.50
a day on a latte, will save you the best part of £400 over the
course of a year. There are plenty of small things like this which
can be changed in order to save you money; such as not paying for an
expensive Gym membership and jogging around the park instead, or
visiting the local market instead of buying packed meals or
take-aways.

There is no need to feel deprived either, you can reward yourself by setting
aside some of the money saved in a savings account for use on a
special treat, such as a weekend break. The rest can go towards
achieving your major goal.

Step 7: Ensuring your identity is safe

Identity theft is one of Britain’s fastest-growing criminal activities,
don’t let crooks steal your identity and run up debts in your
name.

Shred all personal and financial documents before throwing them away, have your
post forwarded when you move, don’t keep your PIN numbers with
your cards, and never give any personal information to strangers,
cold callers, or e-mailers.

The government advises that you review your credit report regularly to
check whether there have been any new applications for credit in your
name. If you do spot anything unfamiliar, you should contact the
relevant lender immediately – and stop the thieves before they
can do any damage.

• See your Experian credit report free with a 30-day trial of CreditExpert,
the credit monitoring and identity protection service. Click here to find out more.

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