Take control of your finances in 2018

Kara Gammell / 28 December 2017

Show your finances who’s boss in 2018. Make this the year you finally take proper charge of your budget. Here are six ways to manage your finances – so they don’t manage you...



1 Maximise your savings

The Bank of England raised the bank rate by 0.25% to 0.5% in November, the first rise in a decade, but it seems that many banks are slow to pass on the benefits to savers. Loyalty no longer pays, with the best deals targeting new customers. If your savings have languished in the same account for more than a year, your interest rate is likely to be less than 0.5%. So it’s essential to review your savings regularly and be prepared to shift to a better account.

How to give your savings a boost.

At the time of writing, the average savings rate is 0.39%, so by simply shifting your balance to a market-leading easy-access savings account that pays 1.3%, you could earn an extra £91 a year on a £10,000 pot.

Don’t forget to make the most of your tax-free ISA allowance. From 6 April 2017, the annual limit rose to £20,000. Stay on top of your interest rates with Savings Champion’s free online savings account monitor, which reminds you when your interest rate is set to fall and prompts you to move your money.

2 Haggle over home entertainment

This can end up being a huge monthly cost. But a survey from MoneySavingExpert.com found 87% of Sky customers who tried to haggle were successful in negotiating a better deal – sometimes shaving hundreds off their annual bills.

Check competitor offers through a comparison website such as MoneySuperMarket.com. Then call your provider’s retention department and say you're thinking of leaving.

Use key negotiation phrases such as: ‘I’m paying too much for my current package’, ‘A competitor offers a similar deal, but for less money’ or ‘I am leaving’.

Time your call wisely and avoid busy peak periods, such as Mondays, lunch hours and weekends – you might need extra time to make your case successfully.

Do you need a TV licence for streaming services?

3 Draw up a budget

Just as nutritionists advise dieters to start by clearing out their kitchen cupboards, the first step in making a budget is to give your finances a thorough sort out.

Scrutinise your bank and credit-card statements to determine where your money is coming from, how much there is and where it's all going. Many of us overlook the little extras that can send a budget into the red.

Simplify the process and track your spending with budgeting software on your computer, tablet or smartphone. This usually helps you to produce a monthly budget, illustrates how you’re currently spending your money and enables you to track the status of your savings and investments.

Try the Money Advice Service’s free, easy online budget planner

Ten tips for eating well on a budget.

4 Get on top of your tax return

It’s due on 31 January! Around 4.2 million married and civil partner couples are eligible for a free tax break worth up to £230 a year, according to figures from HMRC, but just 1.3 million couples have claimed Marriage Allowance.

Everyone has a tax-free personal allowance of £11,500. The Marriage Allowance lets a spouse or civil partner who earns less than that to transfer £1,150 of it to their partner – if their partner pays only basic-rate income tax. Couples have four years to claim a backdated allowance. Apply at gov.uk/marriage-allowance.

The first £1,000 of interest from savings is tax-free for basic-rate taxpayers (£500 for higher-rate). Only when savings income exceeds the allowance is tax due on it. 

5 Get smart – get switching

Energy

Millions of people are paying over the odds for their gas and electricity by sitting on an outdated standard variable rate (SVR) tariff. But only a third of us ever bother to switch provider. Make sure you do! Try sagacompare.com/energy.

Broadband and landline

Signing up to a ‘bundle’ that combines your landline and internet access can be far cheaper than buying them separately. Visit sagacompare.com/broadband to find out whether you can beat the price you’re paying at the moment.

Mobile phone

More than three-quarters of customers are on the wrong mobile phone tariff, with just a quarter of us using all of our free minutes and texts. As a result, we’re shelling out more money than we ought to.

The sheer number of tariffs, deals and one-off offers that are available can make it difficult to find the cheapest plan, so it’s best to go online and use one of services that compare prices from different companies to simplify the process.

Billmonitor.com, for instance, compares more than 2.5 million UK mobile phone deals. By looking at details such as the number of free minutes, off-peak calling and charge limits, it can identify the tariffs that could save you the most money.

Seven tips for safer mobile phone charging.

6 Beef up your benefits

Each year up to £3.5bn of Pension Credit and Housing Benefit is going unclaimed by older people, according to Age UK. So, even if you think that you’re getting everything to which you're entitled, taking the time to check can pay dividends.

Some benefits, such as the Winter Fuel Payment, are entirely dependent on age – and not at all related to income. What’s more, you could discover that you're eligible for Housing Benefit or Council Tax Support. You’ll find lots more information about the allowances and benefits you may be missing out on at saga.co.uk/benefits.

It’s worth spending a few extra minutes checking whether you qualify for any of the age-related discounts, too. If you're over 75, for instance, you're entitled to a free TV licence – that’s a saving of £147 a year.

Informative, in-depth and in the know: get the latest money news with Saga Magazine. 


The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.