9th October 2015 at 11:40am
Have you switched your energy provider, changed your current account, increased your pension contributions or changed your investments recently? If so, you’re in the minority – most people don’t and often lose out financially.
According to research from the University of Sheffield and comparethemaket.com, not doing anything costs UK consumers £7.6 bn a year and can even lead to financial hardship. *
The university and the online comparison site have jointly set up an Institute of Inertia to look at attitudes and behaviours when it comes to managing your money.
Managing your money – Why don’t we sort our finances?
Why do most of us have a habit of putting things off? Dr Thomas Webb, who is leading the research into the issue of inertia, says: “When we talk about inertia we are referring to why we don’t sort certain things out to make our lives better in some way”
“When we talk about inertia we are referring to why we don’t sort certain things out to make our lives better in some way.”
More than half of us admit to never having switched a household utility.* When it comes to energy bills, far too few of us make the effort to switch to a better deal, despite, for example, a recent Government report highlighting that power companies overcharge customers by an eye-watering £1.2 billion a year.
The reason – it’s just seen as too hard to switch, takes too long and often needs numerous phone calls to sort it out. Most of us just don’t even bother.
Yes it’s about companies needing to make things easier for customers but it’s also about understanding our own attitudes to money – and why we don’t take action.
Change our money habits
So what’s the key to getting more of us to do something when the result of changing our behaviour could save hundreds or even thousands of pounds a year?
The Institute of Inertia has created a quiz so that you can find out how you measure up when it comes to your finances. Are you an ostrich who buries their head in the sand? If you really know what you’re doing and manage your finances well, you’ll have your head in the game.
You can check out this quiz here.
Improve where you can
Once you’ve got a better understanding of how you approach your finances, it makes sense to start small when it comes to improving things and work your way up. Be realistic, you’re not going to change habits of a lifetime overnight.
Review your bills on a regular basis to make sure you’re getting the best deals and have a monthly look at your finances to check your spending against your budget. Consider spending a weekend once a year to go through your regular bills and see if you can save yourself some serious money – and pay off debts or start to save some of that money if you can.
“The financial returns can be worth the effort,” says Julie Hutchison, Consumer Finance Expert at Standard Life. “It feels so satisfying to get your finances sorted out – a weight lifted from your shoulders.
“It feels so satisfying to get your finances sorted out – a weight lifted from your shoulders. Getting there means accepting you might need several half hours of your time to make some phone calls or complete something on the web.”
“Using work lunch breaks to do this is one way to get things done. It’s a question of commitment and being organised and wanting to feel rewarded by the sense of peace of mind which goes with getting things off your to-do list.
This information is based on our understanding of legislation and regulations in October 2015. The legislation and regulations can change.
Join the conversation
Join the conversation and follow us on twitter @StandardLifeUK and Facebook and let us know about some of your experiences managing money. Are there particular money management measures you take to ensure your finances are in order?