It’s the start of the financial New Year, so it’s time to do some financial spring-cleaning this April!
April is the start of the new financial year. Time to do a financial spring clean and check out what you have to play with money-wise as we ease out of lockdown.
With so much reopening, we are going to be so tempted to splash the cash. Whether it’s on bars, gyms, hair or nails. However, for many of us, we have been used to locking down our finances. Spending money on coffees? Bottles of wine? Taxis home?
Whether you lost your job during the lockdown, have had a reduced income or are on a tight budget. Or you may have been budget-conscious during the lockdown period and managed to save. It’s always good to get a fresh look at your finances and understand what changes in the financial year mean to you.
Prepare your spring-clean for the financial New Year :
1. Do a financial spring-clean and prepare your budget for the entire year.
I update my budget each month, but each April I create a new annual budget. Plot out everything over the year, not just month by month. You may have a big expense coming up, birthdays, and it’s important to document all of this before looking to start spending money once again!
Look at all of your outgoings and income for the forthcoming year. Document all of your bills, subscriptions and big expenses.
Automate your savings into pots of money. I use different apps and accounts. My rent and bills are in one account. My daily spending in another. I use Plum and Chip to automate savings too.
Use Monzo, Plum or Chip to squirrel away your savings. I use that word because it’s important to pace yourself. With so many festivals, bars reopening, and holidays all opening their booking windows. The temptation is also to buy now, pay later.
2. Whatever your financial situation. DON’T SPLASH THE CASH
It’s a long race not a sprint to lockdown easing. We are not used to be going out so make sure you leave the credit card at home when you are back out.
Monzo said that many people had created savings posts on 21 June, when everyone is planning to party. We all want to do so many things, although not all of us want to get back out there straight away due to anxiety.
Use Monzo, Plum or Chip to squirrel away your savings. I use that word because it’s important to pace yourself. With so many festivals, bars reopening, holidays all opening booking windows. The temptation is to buy now, pay later.
3. Don’t be tempted by the buy now, pay later schemes
With everything opening up, there will be so much temptation to buy. However, don’t start the summer by putting everything on credit. If you have the money you have saved under lockdown, create a “fun fund” separate from your daily bank account. Try not to finance your post-lockdown activities using buy now, pay later schemes.
4. Shop around for deals and be prepared to renegotiate
I have just signed up to Octopus Energy, but have a look at all of your bills to see when they are up for renewal. You may be able to renegotiate a better price. Do your homework and see what their competitors are offering.
5. Check what you are entitled to
So many of us do not know what benefits or allowances we are entitled to. With the pandemic, there have been grants and funds available, but you will need to apply for them.
Personal Tax Allowance
Your personal allowance will rise to £12,570 on April 6th.
Working Tax Credit
People can get a lump sum of working tax credit amounting to £500 on April 23.
If you are out of work you may be entitled to Universal Credit, which replaced Jobseeker’s Allowance. The amount of money you may be entitled to has been increased by £20 a week during the pandemic, which is due to end later this year. Make a claim.
Under 25s can claim £59.20 for their housing benefit this month, while over-25s can claim £74.70.
Minimum wages have increased by 2.2% to £8.91 per hour, and the highest rate will include workers aged 23 and over.
The National Living Wage is for those aged 23 and over) and the National Minimum Wage is for those of at least school leaving age). The rates change on 1 April every year.
23 and over
21 to 22
18 to 20
Council Tax rates have increased by 5% for most households. If you live alone and are out of work you can qualify for a 25% discount. Also if you have signed on for Universal Credit, do apply for Council Tax support and check if you are eligible.
Many bills do increase this time of year. Check to see when your renewal date for your bills is and be prepared to renegotiate. Many providers will have reduced promotions and offers for new clients, but then you will eventually be moved on to a higher price plan. I have recently signed with Octopus Energy, which has a great referral scheme, where you and your friend get £50 if you switch.
Prescription costs will rise to £9.35 from today, while three-month PPC’s increase by 60p and 12-month PPC’s increase by £2.20. If you buy regular medication, then you might pay to buy a pre-payment certificate.
TV license fees
Annual TV license fees will rise by £1.50 from £157.50 to £159.
Cash / Stocks & Shares ISAs
Savings tax-free allowances remain at £20,000. So if you want to save this year but are not wanting to dip into your savings for any reason. Shop around for a good ISA to kickstart your savings plan.