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Getting your finances in order

Have the lockdowns of 2020 made you reconsider your finances? If so, you’re not the only one.

Almost everyone has areas where they’d like to improve with their money and goals they’d like to achieve. But how do you make sure your resolutions don’t fall by the wayside?

Breaking things down into simple steps and getting stuck in straight away can help. Here are some ideas to get started.

1. Get your financial fitness score

As we all know, 2020 was no ordinary year. So even the best laid financial plans may have gone awry. Still, it’s worth taking the time to look back at how the year went: were you able to save as much as you hoped? Did you reduce your debts? 

Our financial fitness tool will give you a score and tell you how you compare to others like you. Just answer a few quick questions to find out where you stand and the steps you can take to improve your financial position.

Get your financial fitness score.

You can also use this information as the basis for a budget for 2021. This will help you keep account of where your money is going and also plan for any big expenses.

2. Assess your accounts

Are you happy with your current account? And if you have a credit card, does it still suit you? If not, now could be a good time to think about switching or cancelling any unused accounts. There are often good deals for people who switch, so look around to see what's on offer.

But before you jump into anything, make sure you look beyond any introductory deals and at the full terms and conditions. For example, if a credit card offers 0% interest for the first 6 months and then the interest rate dramatically increases, it may not be the best option. 

Tip: It can be worthwhile looking at your suppliers for things like energy and gas to make sure you’re happy with the rate you pay. Comparison websites may be able to help you tell whether you have a good deal.

Explore more: Switching current accounts - what you need to do

3. Set your goal

Where do you want to be by the end of the year? It could be related to:

Once you’ve set your goal, break it down into small steps and keep it front of mind. This can mean setting yourself little milestones to reach by the end of each month and even doing something as simple as sticking a reminder onto your fridge. Be realistic. You don’t want to get 2 months in and feel like there’s no chance of reaching your target.

Explore more: How to make the right financial decisions

4. Settle into savings

No matter what your goal is for the year, building up your savings is likely to help you achieve it. If you’re focused on clearing some debts, saving can be the next step once that’s done. 

It can be helpful if you have a separate place to store your savings, so you’re not tempted to dip into them for your daily spending. 

If you have a savings account, it may be a good time to consider whether it’s working for you. If you don’t have one, it could be a good time to think about setting one up. The right kind of account for you will depend on your circumstances and goals. Knowing how they work will help you make this decision.

Explore more: ISAs vs savings accounts: what’s the difference?

Once you have a separate place to keep your savings, a good habit to get into is paying yourself first. This means that when you’re paid, one of the first transfers you make is moving your savings for the month into a savings account. Again, this helps you to remove any temptation to spend your savings.

Tip: Setting up a standing order can mean this happens every month without you having to lift a finger.

5. Think about the long term

It’s never too early to start thinking about the future. It’s great to have goals for 2021, but what about beyond? Perhaps you’d like to buy a property, start investing or put more into your pension. 

Even if it feels like these goals are a long way off, it’s worth trying to picture when you’d like to achieve them so you can think about what you can do this year to get you closer. 

If you know somebody who’s recently done something like buy a property or start investing, it may be a good idea to have a chat to them about how they went about it and get some tips. Everyone’s experience is different, but the more you know the better placed you’ll be.

Explore more: Planning for the future

What's next?

Book a financial health check

You can book an appointment with one of our financial fitness trainers, who can take you through a quick and easy 30 minute financial health check. Our financial fitness trainers are on hand to speak to you about your banking needs - and you don’t have to be an HSBC customer to benefit from this service.

They won’t give financial advice, but they’re here to help you achieve your financial goals, whatever they may be. They will be able to explain where you’re doing well and where you may be able to improve focusing on what is important to you. 

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