Like most of us, it's likely that over time you’ve signed up for multiple financial services and products, which made sense when you signed up, but might not be so relevant for you now. That product which offered additional insurance cover that you’ve never used, or the subscription that over time you'd forgotten about. Now, as you're working on your plan to start investing, it's the perfect time to get rid of those services which no longer make financial sense for your lifestyle today.
With these 4 simple steps you can redirect that money to better use:
1. Cancel those unused monthly subscriptions / Direct Debits
We all have them, those payments going out of our account on a monthly basis for services we no longer use. That TV, or music streaming service we stopped logging into. That magazine subscription which stopped posting out its latest issues’ months ago. This is a good time to view your bank statements, your Google or Apple account payments settings and check whether money is going out which could be put to better use by cancelling those subscriptions.
2. Paying for the same insurance cover more than once?
A great way to optimize your coins is to check whether you are receiving cover for the same services on your bank accounts, credit cards, membership services or other subscriptions. By doing a bit of research, you might find that you receive the same cell phone insurance cover from your cell phone provider, your credit card and your bank account. If that is the case and you are paying a monthly fee for each of these insurance products, work out which package gives you the best overall cover and cancel the others. If you don’t know what you are covered for, reach out to your product providers and ask them to email you details of the packages you are signed up for – at some point there will have been contract terms that you signed, or agreed to.
3. Why do I need so many bank accounts?
We’ve all heard that old saying “the more the merrier”, but when it comes to your bank accounts, that might not always make sense. The number of accounts you have will depend on your own individual situation and your personal goals; at a minimum this should be one checking account and one savings account. You might also have separate accounts to spilt monthly bill payments from personal spending, or short-term saving from long term savings. It's important to ensure that the benefits of the accounts you have outweigh any fees that may apply, particularly for those less frequently used accounts. Take a moment to think back to accounts you opened years ago, maybe a student account which you signed up for during freshman week at university, or the account you opened because they offered a great introductory rate, but you’ve never used since. Having too many accounts can become overwhelming, but different accounts can help you to organize and achieve your financial goals - so get wise about what you are trying to achieve and if those additional accounts aren’t helping you to achieve your goals, don’t overthink it - close them and keep it moving.
4. Consolidate or negotiate better rates on your credit cards
When it comes to streamlining your finances, if you are managing multiple credit cards, consider consolidating to a few that you need and use. If the fees you are paying are too high, don’t be afraid to call your credit card company and discuss options for a lower interest rate. If you don’t ask, you don’t get, so why not take a few moments to make that call. When it is not possible to renegotiate your rate, they will certainly give you advice on other options which might make sense and help you to get the best out of the credit arrangements you currently have. Also, don’t ignore the opportunities to move your balances to new cards with low introductory rates. If you have a decent credit score and are not over utilizing the cards you already have, moving your balances to cards with better rates may be a good option to consider.
However, when it comes to decisions about your credit management, keep in mind that cards you have held for a long period of time and managed well can help increase your credit score. It shows potential lenders that you are capable of managing debt responsibly over a long period of time and makes you a more attractive candidate for future lending.
When it comes to your finances loyalty isn't always the best policy, so don't be afraid to drop those products which no longer make financial sense. A few dollars saved here and there can really make a difference, so let’s turn it around and get serious about putting your money towards a purpose which matches your goals.
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