How to take a quick look at your financial health in five minutes – and what to do next

We’ve all been guilty of putting off checking our bank balance or outstanding bills for longer than we probably should out of worry for what we’ll find – but experts explain that being aware of your financial health, no matter how uncomfortable it makes you feel, is essential to keeping afloat.

From checking your credit score, to being aware of any debt you might be carrying, to simply knowing if you’re close to your overdraft limit, there are quick steps you can take to be more aware of your finances and how you can make your money stretch further.

There are also things you can do in just one afternoon to bolster your finances – like checking to see if you’re eligible for any benefits or grants to help pay your bills.

Read more:

• How to manage your money if you become ill or disabled
• Going into debt doesn’t mean you’ve failed. Here’s how to get help
• Here’s where to get help if you can’t afford to pay your energy bills in the cost of living crisis

Here, experts explain the checks you can make to gauge your financial health in less than the time it takes to make a cup of tea.

Take stock of your finances and any savings

It’s time to take a deep breath and look at your bank balance. It might be worrying, but being aware of exactly how much you have is crucial to staying on top of your finances – using mobile banking and checking your balance every morning, for example, can be a great habit to get into.

While you’re checking your balance, in just five minutes you can see how much money you’re working with, if you have an overdraft or any savings. It’s worth double-checking if you have an overdraft arranged with your bank – if you don’t, reaching a negative balance may incur fines that can become costly. Citizens Advice has some good tips if you’re struggling with your overdraft.

You can also check your credit card balance if you have one, and make sure you’re in a position to manage your credit card bill. Setting up a monthly payment can help.

If you do have savings, you could use five minutes to check if your savings could be working better for you. MoneySavingExpert has some good advice on finding a savings account with interest, or opening an ISA if that’s right for you. Finding a good savings account that earns interest is a positive move, as it means your savings will be making a little bit of extra money for you, rather than just sitting in your current account.

Check any debt you may be in

Go through all of your latest bills and bank statements, and take an honest look at if you’re in any debt, and if so, how much debt and who you’re in debt to. Experts explain that the most important thing to do if you find yourself in debt is to not ignore it, but instead to take the time to address it with the help of a debt organisation.

There are many charities and organisations you can turn to if you’re struggling with debt – StepChange, National Debtline, PayPlan, Citizens Advice and Debt Advice Foundation are just some of the organisations you can approach – and experts say the sooner you reach out for help, the better. 

A debt advisor from any of the organisations above can help you access support for managing debt, like the government’s breathing space scheme, which gives temporary protection from creditors while you get advice and make a plan. They can also create a budget and plan to help manage your debt, or advise you as to whether you might be eligible for a debt relief order, or, in extreme cases, whether you should declare bankruptcy.

Fiona Hughes, media and PR manager at debt charity StepChange, says that if you’re struggling with debts, “prioritisation is key”.

“If you’re in arrears across essentials such as rent, mortgage, utilities, council tax, these are known as priority debts, and should be dealt with first,” says Hughes. “This is because the consequences of non-payment can be more serious. After that try and address the highest interest-bearing consumer credit debts, like personal loans or credit cards, and work from there.

“If this isn’t enough to clear your debts, don’t panic – free, impartial and non-judgemental advice is always available. At StepChange, we offer free debt advice online with expert advisors here to help you over the phone. We’ll get a clear picture of your financial situation, debts, and recommend a path forward to becoming debt free, and getting back on track.”

Quick tips

If you only have five minutes to assess your financial health, there are steps you can take.

• Use a financial checker: If you’re between the ages of 45 and 65, MoneyHelper has its own midlife financial checker, which can assess how financially prepared you are for later life, including your pension.
• Check to see if you’re eligible for any grants. Grants are available to help pay for things like energy bills if you’re struggling to pay them, while Turn2us has a search function to check if you’re eligible for any charitable grants.
• Check your credit score. It can be done for free on a variety of websites like Experian and it helps you to be aware of how easy it may be for you to access things like loans. The positive thing is, there are many different ways to improve your credit score – and they can even be unexpected, like registering to vote or paying your mobile phone or Netflix bill.
• See if you could be eligible for benefits. StepChange and Turn2us have calculators on their websites and they could find extra money you could be entitled to.
• Look at certain outgoings like your mobile phone bill – comparison websites may be able to find you a better deal and save you some cash.
• Check your direct debits to see if there are any subscriptions you don’t use, or outgoings that you can cancel.
• Check your payslip. It’s good practice to check your payslips, and there could be some deductions that need to be updated.

After you’ve got a sense of your financial health, experts say you can begin to create a budget, debt plan, or a plan to put away money in savings.

What you can do next

Once you’ve got a sense for your financial health, experts say you can begin to lay out a plan to tackle any debts you might have, as well as create a budget and plan for savings.

Hughes explains that being aware of your financial situation is a positive first step, can can be “hugely beneficial in making savings, keeping on top of bills and credit commitments, and preventing debt issues from escalating”.

She explains that next steps could include “creating a detailed monthly budget, and updating it regularly to make sure nothing’s changed. To help you get started, we have some useful budget templates on our website.”

There are also many free budgeting tools available online including the budget planner on the MoneyHelper website. Other tools include The Money Charity’s budget builder, Citizens Advice’s budget tool or Money Saving Expert has a downloadable budget spreadsheet.

If you think you may be eligible for benefits like universal credit, you can take some time to check a benefits calculator – StepChange and Turn2us have calculators on their websites – to see if you can bolster your finances.

“Last year, almost £3 million in extra monthly benefits was found for the people who had used our calculator,” Hughes says.

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