Why You Should Do a ‘Money Makeover’

How are your finances looking? Even if you think they’re generally pretty healthy, everyone can benefit from doing a ‘Money Makeover’ – but what is it and how will it boost your bank account(s)? In this article, we focus on the valuable budgeting practice, featuring quotes from people who’ve recently assessed their funds in a bid to save more money in the long run.

What is a money makeover?

Whether you want to call it a financial ‘glow up’, a ‘money makeover’ or exactly what it is: assessing what’s coming in and out of your account to make your funds go further, it’s undoubtedly one of the easiest things you can do to save some cash.

In short, a money makeover involves taking a look at where you’re spending money (and what on), with a view to cutting down expenditure.

In this piece on the Money Saving Expert site, Martin Lewis – financial journalist and broadcaster – sings the praises of money makeovers, saying: ‘Taking a day to cut your bills saves many people £1,000s over the year’.

Yes, really.

Martin continues: ‘So check your bills NOW and see if you can save £100s on broadband, mobiles, food and more by working through your finances one-by-one to ensure you've the best deal on everything.’

Money Makeover: First Things First

By embarking on a money makeover, you can boost your credit score as well as become better at money management in general.

First things first: ask yourself if you’re spending more than you earn? You may well know the answer to this if, for example, you:

• Regularly find yourself in your bank account’s overdraft
• Frequently borrow money from friends or family
• Have a loan or use payment plan services for smaller purchases or treats.

If you’re spending falls outside of your means, you may have to make some lifestyle changes beyond simply comparing and securing cheaper deals on, say, your utility bills.

Thirty-five-year-old Tracy from West Yorkshire says: “When money has been tight, I’ve used payment plan apps to spread the cost of purchases – and while I’ve never missed a payment deadline, it isn’t a nice feeling knowing I’ve been wearing that new dress or top for weeks and I’ve yet to pay for it.”

If you assess where you stand in terms of your incomings and outgoings, you can ascertain whether you can afford to treat yourself to something (or even more than one little luxury) each month.

Want to assess your spending? Martin Lewis offers a handy budget planner online, which may help you manage your finances better.

Step Two: Find the Best Deals

So, how can potentially save hundreds (or maybe even thousands) in just a day?

Make a list of all your outgoings, including everything from your monthly mortgage or rent payment, to individual utility bills, your phone bill, the cost of commuting to work, office lunches, and anything and everything in between.

Then, one by one, work through your list and see if you can cut down the number next to the pound sign for each item.

Currently spending £40 a month on your gym membership? Perhaps you can find a cheaper alternative, which could save you £20 per month straight away. Take up outdoor cycling instead of indoor spinning, for instance, and you’ve instantly saved £40 a month. Go with a friend and you’re still getting the social element of the gym, without the hit to your bank balance.

The same goes for your other bills; can you use comparison sites to bring down your utilities – or perhaps you can get a better mobile phone or broadband deal, or swap regular takeaways for a home delivery food cooking kit? With the latter, you’re still getting a treat but likely cutting down your expenditure a fair bit in the process.

Tagging Martin Lewis in a Twitter update, keen budgeter Alexander Parker said: “I have followed money saving for many years after but spent today with my partner @gothiccuriosity doing a money makeover we saved £6712! The best paid day this year big saving is cutting a year off the mortgage with lower rate than my student loan.”

Step 3: Reassess your finances

How did your money makeover go – and how much do you stand to save going forwards? Remember: budgeting needn’t mean going without. Instead, if you’re savvy enough, you can find different ways to enjoy the things you love, while still saving some much-needed funds for a rainy day.

You’ll probably find that, following your money makeover, your monthly spend is lower, giving you some wiggle room to save more, if that’s what you want to do.

Learn more about our financial products*  each designed to help you work towards your own financial goals.

Until next time…

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