How To Give Yourself An Effective Financial Overhaul

When was the last time you gave yourself a financial overhaul or even a spending detox? As the year creeps towards a close, many people's thoughts turn to Christmas and how they will survive the festivities.

While the government is predicting that the economy is likely to return to pre covid levels earlier than expected, there is no denying that the lockdown measures have impacted many families across the country and price rises and reduced incomes are making things even more of a struggle than in previous years.

The figures show that over 2,5 million households used food banks in 2021, a rise of 600,000 in previous years. The need for financial security is something many families are praying for and this time of year does nothing to support efforts to get back on their feet.

When addressing your financial habits, you should aim to reassess what you earn and spend regularly. Being organised can help you make savings where possible and change your spending habits to allow you to accommodate a change in income or circumstances.

With many people's finances stretched to the limits, what are the best ways to give yourself a financial overhaul this year and improve your money habits?

Take Stock Of Your Income


The first place you need to start when addressing your finances is to sit down and take a good look at exactly how much money is coming into the household.

Find yourself a free to use app or simple money management spreadsheet to help you create a complete picture of what is happening in your accounts.

You will want to input all of the regular deposits in your accounts and when they clear. It is vital at this stage, all the figures you input are correct and a realistic representation of your finances. For some people, it can be hard to look at the cold hard statistics on the right day, especially if you are frequently robbing Peter to pay Paul. But you need to know what you are working with before you can make any changes.

Next, you want to address your regular outgoings. At this stage, you do not need to think about making cuts; you need to know what you have to pay out each month.

Start with your basics such as rent, utilities, council tax, insurances and so on; include your subscriptions for streaming services, gyms etc. then add in your irregular outgoings, this can consist of clothes shopping, meals out, takeaways, your food shop if it changes each time until you have a clear list of every single penny coming into your household. You are aware of where it is all being spent.

Check Your Credit Rating


You cannot get a clear picture of your finances without knowing your credit score and what is contained in your credit file.

Experian, Equifax, and TransUnion are the three credit reporting companies that have been approved for use in checking your credit score. A “soft check” is performed on your file by each of these companies, which means that they will examine your credit rating without informing any lenders that you have done so (as sometimes checking your score regularly can work against you). When your report is generated, you will be provided with a numerical score and a brief explanation of how the score was determined.

Making sure your bank is aware of any housing movements and getting yourself on the electoral roll are essential steps in improving your credit score. You can also demonstrate your financial responsibility by making on-time, dependable payments and staying on top of any debt by making the bare minimum repayments regularly.

Keeping track of your credit rating may not seem vital right now, but your present spending habits could have a long-term influence on your capacity to borrow money or obtain a mortgage in the future.

Why Are You Doing This?

keys to house
This is such an important question to ask yourself. Why? Any measures you take to get your finances under control will likely fall flat if you don't have a reason for doing this. It can seem like a lot of effort for minimal reward unless you have a tangible goal to work towards.

It could be you want to improve your financial situation and make some savings in your outgoings. It could be for a holiday, a new car, paying off debt, getting a mortgage, or anything. Once you have a goal to work towards, it will help any changes you need to make easier and give you something to focus on.

Set yourself a primary end goal with a time limit, and then break this down even further by giving yourself shorter and smaller goals.

For example, if you want to save for a mortgage, you can give yourself monthly tasks to save a set amount and find new ways to save or make money to put into this pot. It is more motivating to reach the smaller goals and help you track your progress even the smaller steps, especially if you have a larger end target, as this can seem overwhelming and potentially unreachable.

Set A Budget

wallet and credit card

A budget is an essential component of your financial overhaul. After all, the reason for doing this is to assess where you can make any changes or savings.

Start with the figures you wrote down for your essential outgoings ( this is your rent, bills, council tax and so on). Identify where you can make savings and adjust your spending habits.

It can be worth setting reminders in your calendar for the end of contracts, such as comparing new mobile phone contracts, car insurance, 0% balance transfers for credit cards and so on. This can help you remember not to get new quotes to help you reduce your outgoings once the time comes.

Set your spending limits to help you to save more money on frivolous spending. You don't need it to remove all the fun from your life, be aware of what you are spending and where and how this affects your income and ability to save.

Don't forget to cancel any direct debits you no longer want or use, such as gym memberships, your amazon prime or kindle payments, if you aren't using them frequently enough to benefit.


Automating your payments by setting your bills to be paid via direct debit can help you get discounts on your bills and not miss a payment. Move your bill money automatically out of your account, so you aren't tempted to spend it, and if possible, set up a savings account and have your nominated sum transferred to your savings account as soon as your money hits your account to help you get into the habit of saving money.

Put your money into a higher interest savings account or an ISA. Check the withdrawal limits on any accounts you set, especially if you need to keep dipping in for emergencies or lump-sum payments throughout the year.

Be Realistic

While your budget should be realistic, it’s not uncommon to find your spending plans are a little too tough to stick to and real-life also often throws curveballs you couldn’t have predicted.

If you find yourself struggling, don’t panic. Regularly setting aside a little time for an honest reassessment of your outgoings can help you to overcome difficulties in the short term.

Even if your intentions are in the right place, many people do not meet their budgeting goals because after they create their plan, they do not take adequate time periodically throughout the year to review the plans you made.

So make a point to constantly reassess your budget and spending habits and allow for discrepancies in your life that will affect this from time to time, such as birthdays, breakdowns or repairs.

Address Debt

Another main reason people struggle with finances is that they are working under the weight of their debt repayments. High levels of debt can affect us financially, mentally and physically. Addressing what you owe and to whom can help you put plans in place to pay off what you owe in a way that doesn't absorb all of your extra income.

If you can make the repayments, avoid spending on credit cards once you have done so to help you bring down the total debt on your credit card(s). It can be worth consulting with your lenders to see if there are any other options they can offer you. If your accounts are in good standing, you will have better options, such as reducing APR rates or allowing for consolidation options. Consolidation loans can help you make one manageable payment, but they can also increase your debt level.

Alternatively, consult with a financial expert to help you resolve your debt if you struggle to make repayments on time. The citizen's advice bureau can assist you with working through your debt problems.

When it comes to giving yourself a financial overhaul, you should be honest about your spending habits and realistic about how many changes you can make to help you stick to them.

*Collaborative post

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