Do one thing: small steps, big impact
06 November 2023
While money may be a subject that’s not far from the front of people’s minds, it’s far from the easiest topic of conversation.
This year, R3 is taking part in Talk Money Week, a national campaign that aims to help break the stigma around talking about personal finances. This year’s theme is "Do One Thing," encouraging people to take just one small step towards financial security.
In this article, we’ve identified five things that experts recommend doing in order to improve the health of your personal finances and outlook. Doing just one of these five things can be an important step towards improving your future finances…
1. Check your credit score
One of the best things you can do to understand your financial position is to check your credit score. Your credit score tracks lots of factors and influences your ability to take out loans, mortgages, or other forms of credit.
By tracking your score, you should be able to spot any errors that might be dragging it down and fix them. You will also have access to any negative points that are hurting your score, like late payments, using a high percentage of your credit limit, or not being registered to vote.
2. Start a conversation
Talking about money, especially when there are causes for concern, can be awkward, but as they say, a problem shared is a problem halved. Take the time to sit down with the closest people in your life – whether that be a partner, your family or someone else, and talk to them about your situation and what’s worrying you.
By being open, you can work out your financial goals and budgets, avoid misunderstandings, and work together towards resolving any problems. For the younger people in your life, it’s also a great opportunity to talk about responsible money management and help break the cycle of thinking that finance is a taboo subject.
3. Report your rent payments
While everyone knows mortgage payments have an impact on your credit, not everyone knows that on-time rent payments can be recorded to positively affect your score.
There are lots of online resources that allow you to report your rent payments to credit reference agencies, showing them that you’re paying your bills promptly. This is true no matter who you pay your rent to – whether it’s an agency, a landlord, or a housemate. This is a simple step that can make a significant difference when you eventually apply for credit, such as a mortgage.
4. Automate your bill payments
Juggling your bills can be a hassle, so if you haven't already, it's worth setting up automatic bill payments to streamline this process. Most regular bills like water, energy, rent or mortgage payments, and council tax can be paid via direct debit, and you should have the flexibility to schedule these payments on a chosen day, so you’ll avoid the hassle of multiple due dates. If you can afford to do so, you can also set up a monthly direct debit to your savings account which saves you from worrying about making manual transfers.
Automating your payments not only streamlines the process, but also shields you from late payment fees, helping you to maintain your credit score. With credit cards, it's important to think about your direct debits carefully. Paying only the minimum each month may mean you start to accumulate debt, which can become a financial burden later.
Take a moment to consider what you can comfortably afford to pay off each month and, where you can afford to do so, set up automatic payments for an amount higher than the minimum to steadily reduce your debt.
5. Seek advice
Lots of people deal with debt at some point in their life. If you find yourself struggling, seeking advice early can make a really big difference in regaining control of your finances before the situation gets out of control.
Dealing with debt can be daunting, but you don't have to face it alone. Seeking guidance from a qualified professional, such as an insolvency practitioner, can be a pivotal step in getting your finances on track before your options become limited.
Insolvency practitioners can look at your situation and help guide you to through the options for resolving your situation. By seeking help early, you’ll have better peace of mind, and there will likely be more solutions available to you to potentially resolve your financial issues.
For more information on how to deal with money worries, download our free guide.
R3 members can provide advice on a range of business and personal finance issues. To find an R3 member who can help you, click below.