It’s that time of year again. But rather than giving up something in the name of self-improvement, why not resolve to gain something: more money in the bank.
Many of us mean to take control of our finances, but never get around to it. You could save a fortune, however, if you deal with debts, organise your money and wise up to making more from savings.
Firstly, if Christmas damage is limited to an ornament demolished by an overexcited grandchild, you’ve got off lightly.
More serious harm is likely to have been done to your bank balance, particularly if you have been putting everything on credit cards, and running up debts which can take an absolute age to pay off.
Don’t worry. You can get yourself back on track by following these tips. So, out with the old financial bad habits and in with the new good ones.
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Do some number crunching
Pick a quiet afternoon and get out a few months’ worth of bank statements. Find out exactly what goes in, and what comes out. You might be surprised and enlightened (or frightened) about where your money actually goes.
Deal with debt
The first step to dealing with debt is to tot up what you owe – and start to budget. If you don’t budget each month, now is the time to start. You’ll instantly see where you can make savings. Then put the money saved towards paying down your debt.
If your debt is on a number of credit cards, after ensuring that you have made the minimum payment to avoid penalty charges, concentrate on paying off those with the highest interest rate first.
Set up a direct debit for the minimum payment for your credit card, which will stop you getting penalty charges for missing a payment. Pay as much extra on top of the direct debit as you can afford, to bring your balance down faster.
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If you have a large amount outstanding, converting to a personal loan could work out cheaper. This isn’t always the case, but it is worth investigating.
Alternatively, you could consider moving your credit card debt to a card that offers a better interest rate. But don’t forget to factor in any ‘transfer fee’, and continue to make payments of as much as you can afford, not just the minimum.
If you have a 0% interest card and you don’t pay more than the minimum each month, do put money aside in a savings account to pay off the debt at the end of the deal.
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Cancel unused payments
January is a great time to commit to going to the gym. Be honest, though. Did you sign up last year and only go twice?
If you are a dedicated couch potato, perhaps the occasional visit to the local leisure centre would be better than paying for a gym you never use.
Guard against a bad credit rating
If you haven’t checked your credit rating recently, it is a good idea to do it now.
Switch to budget supermarkets, such as Lidl or Aldi, and shop smart in the big-name supermarkets too, by stocking up on special offers, buying own label goods and checking the reduced-items shelf. The average family can make considerable weekly and annual savings by purchasing cheaper comparable items.
Get shopping discounts
When taking out financial products, shopping or eating out, use cashback schemes and vouchers to save money. You can either sign up to a scheme such as TopCashback.co.uk or Quidco.com to collect financial rewards, or simply search online for vouchers and offers before you buy an item or visit a restaurant. Just Google the name of the retailer and the word ‘voucher’ and see what comes up.
Switch utility providers
Check whether you are getting the best deals on your broadband and domestic fuel, and switch providers if necessary. Remember to check that you’re not liable for an exit penalty.
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