There are several financial bits and pieces I am determined to tidy up in the weeks ahead
I enjoy this time of the year. A period to plan for the future and be positive. To think about summer holidays, maybe plan a few home improvements.
I am already looking forward to resurrecting the cruise trip I was going on with mother before breast cancer got in the ugly way. Although Mum won’t admit it, she has made a remarkable recovery from her operation and is as feisty as she has ever been. A bit of early summer sun will do her the world of good. Valletta, Athens and Santorini, here we come. Deckchairs, calm seas and the occasional glass of bubbles.
I am also keen to up the ante on the running front. I met a remarkable man the other day who has lost a couple of stone by running every day. I hadn’t seen him for a while and was blown away by how lean and mean he has become. I am determined to follow in his footsteps. No more excuses for not going for a gentle jog in between work deadlines. I will get outside and clear my head. Work hard, play hard.
I will also take time out to think about money issues and ask myself: “Am I doing all the right personal finance things in my life or could I be improving my money strategy?” The respective answers I know already – no and yes.
On a positive note, I have just fixed the payment rate on my Santander home loan for the next two years – a step that buys me short-term payment certainty. I have also been making small, regular overpayments by popping into my local Santander branch whenever I am nearby. The odd £100 here, the occasional £150 there. By the time the end of 2021 arrives, I want to be in a position to be shot of the mortgage. It would feel as if a yoke had been removed from my neck.
I’ve also been adopting the same approach towards my Cash ISA. Although savings rates remain painfully unattractive, I still like the financial comfort that it brings. So whenever I’m near a Metro Bank branch, I think about depositing another £50 – or £100 if I feel flush (which is not often). Indeed, I’ve got to know the staff at one branch quite well. They know what I am going to do before I hand over my cash.
I see my Cash ISA as an emergency fund – a financial tank to draw water from if a tax bill needs to be paid, odd teeth need to be filled, or I tread on my spectacles and need a new pair. It is flexible and money that I can access on demand. It is also the closest I will get in terms of creating my own mini tax haven – a fund that no Chancellor of the Exchequer can get their greedy hands on.
If I could just be a little more committed on the mortgage overpayment and Cash ISA topping up fronts – for example, never walking past Santander and Metro branches without going in – I would feel a lot happier financially.
The same goes for my Investment ISA. For a while, I haven’t been making regular monthly payments into it – for all kinds of reasons: political uncertainty, other financial priorities and the fact that every time I try to reinstate my direct debit payment with the platform provider I have my ISA with, it hasn’t kicked into action. Maybe I should have ironed out the problem earlier, but I will put my Investment ISA back on track.
Nothing too sexy, nothing too adventurous. Just regular monthly contributions into a spread of global investment trusts renowned for their ability to increase their dividend payments every year by investing in an international spread of companies.
For choice, I won’t look beyond the ‘dividend heroes’ list that the investment trust trade organisation – the Association of Investment Companies – publishes on its website (Theaic.co.uk). These are trusts that all have delivered at least 20 years of consecutive annual increases in dividend payments to investors.
There are other financial bits and pieces I am determined to tidy up in the weeks ahead. I have clung on to the supplier of my home electricity (British Gas) for far too long on the basis of convenience when logic tells me I should shop around for a cheaper provider. Loyalty never pays – an argument that also applies to motor and home insurance.
I will be reviewing all my direct debit payments to ensure I really need them. Last year’s direct debit audit resulted in the culling of a subscription for a gym that I rarely used. A monthly saving of £100. No doubt, there will be something I can cull this time around too.
Jeff Prestridge is the personal finance editor of The Mail on Sunday.