If you’re like 99% of Britons, chances are you’re not fully on top of your finances. That’s not a made up statistic, even though it sounds far fetched – research from the Office of National Statistics (ONS) shows that:

“only 1 in 100 of us is truly financially savvy”.

For most of us, ‘getting on top of finances’ is one of those things we know we should be doing, but somehow never get around to. We all like to think of ourselves as responsible adults (at least most of the time!), yet for some reason the idea of dealing with financial matters can seem overwhelmingly daunting.

The reason could be that there seems to be so many facets of ‘dealing with personal finances’ that it’s difficult to know how to unravel the complex web of our own money matters.

Perhaps a good place to start is with some of the categories used in the ONS research – planning ahead, organised money management, controlled spending, staying informed and choosing products.

The ONS defined this as the ‘extent to which someone makes provision for future expenditure from current income’ and planning ahead for a rainy day is one of the key areas of getting on top of your finances. Part of that is the ability to save up for major planned expenditure like a holiday or a new car, but surely protecting yourself financially with the right insurance policies should also be part of your considerations.

Insurance products can give you the peace of mind that should anything happen to you, your dependants (with life insurance) or even your own income (with income protection) will be supported simply by sacrificing a small part of your current monthly earnings to pay for a policy.

Top Tips for Planning Ahead:

• Grab a calendar and look ahead throughout the year to mark on when you know you have a big expense coming up so you can save in advance– will you want a new outfit for an important wedding? Do you want to save for a holiday? Do you have money set aside for gifts and celebrations? Put them on your calendar and plan ahead.
• Think about whether an insurance policy to protect yourself financially in the future would be a good investment of a relatively small amount of your current monthly earnings.

The research defined a ‘highly capable person’ in this area as someone who knew ‘to within 1 or 2 pounds, their bank balance or the cash they have available for everyday spending’. While that may be too much for many of us, it’s a good idea to always have an overview of where you are with your available money.

Some people prefer to deal in cash so they can see what they are spending in physical form, or others like to keep receipts or write down what they spend as they spend it. The easiest thing to do is simply to stay abreast of your own bank balance and know where your money is going.

Top Tips for Money Management:

• Download a banking app to your phone to make it easy to check your balance. Get into the habit of checking regularly – perhaps every few days – to make sure you know where you’re up to. Some apps even allow fingerprint recognition log in so you can look up your bank balance in around 4 seconds (we timed it!).
• In addition to checking your balance, also get into the habit of taking more time to look through your statements. Make sure you know how much your direct debits and standing orders are for and keep an eye out for any payments that you could cancel because you no longer need the service or forgot to unsubscribe.

This one is defined by the ONS as ‘the extent to which someone keeps up to date with changes in the wider economy’ but sometimes even knowing where to find information about general money matters – and knowing which websites and publications to trust – can be overwhelming.

Respected newspapers such as the Financial Times can be useful sources of information, as can radio and TV reports, as they are all governed not only by a journalistic code of ethics, but also have editorial checks in place to make sure the information they publish is accurate.

Websites usually have fewer levels of editorial structure which means the information can be published directly onto the web without anyone checking it so it’s important to take responsibility yourself for making sure that the website you’re reading is trustworthy.

Top Tips for Staying Informed:

• Be aware that anybody can launch a website giving ‘financial information’ without any qualifications or ethical checks, so make sure you’re using reputable sites. All websites selling financial products should be regulated by the FCA and should clearly display their FCA number and their Registered Company number so remember to look to see if they do.
• Other things to check for include a landline phone number so you can reach the company if you have any queries, and recommendations from other reputable media sources which adds credibility. For example, we are recommended by The Guardian, The Express and MoneySavingExpert.com, just to name a few. If another publication is willing to stake their own reputation on recommending a website, it’s a strong indication that the website is trustworthy.

A highly capable person will have shopped around, consulted best buy information or used a comparison website, say the ONS, but knowing how to shop for financial products is a skill in itself with so many websites competing for your attention. When picking a comparison site to use, look for websites with information presented in easy to understand language and jargon-free text to help you figure out what it is you’re buying. Narrow down what you need through research and read around the subject.

Top Tips for Choosing Products:

• Rather than choosing a comparison site just because they have the biggest advertising budget, look into whether a more low-key site might be better suited to your needs, for example Moneyworld.com isn’t the biggest player in the market, but we see ourselves as more approachable, we don’t use pushy sales techniques and we have people on the end of the phone you can chat to if you’re confused.
• Be aware that different comparison sites, and even brokers, will charge differently. Financial products, particularly insurance often have big commissions built in for the broker. This pushes the premiums up. At Moneyworld we give up most and sometimes all of this commission which reduces your premiums.

Getting on top of your finances may sound like a daunting prospect, but by taking it one step at a time – and making those steps small enough to encourage you to keep taking them – is the secret to getting on top of one of the most important aspects of your life.