Spring Clean Your Finances
It's always worth having a bit of a spring clean of your finances every few months and coming up to April (the 4th month since our New Year clear out), we thought it high time to make sure you aren't overspending in any area of your life.
It's especially important at the present moment in time as bills increase on our food costs, house energy bills rise and fuel costs take a hike, meaning we could be spending more than usual on everyday living. Then take into account the slowing down of the housing market, as property value rises start to slow down, and less people are able to sell their house or move home.
Mortgages
If you are not on a fixed rate mortgage or tied into a special deal then it's worth seeing if there are any available for you to apply for. Even if you are coming to the end of a current fixed rate deal, it's worth checking your options out. If you find a better offer elsewhere you can switch your mortgage to a different lender and make a big saving. If you can overpay a bit each month on your mortgage, do so - it'll clear it even quicker and will mean the total interest you pay over the lifetime of the mortgage will be less too.
Credit Card Debts
It's so important to make sure you clear any debt you owe on credit cards. This includes store cards too. These type of borrowings are usually high interest and it is easy to get stuck in a cycle where you just pay the minimum each month and never get it cleared. In fact you will be in a perpetual loop of always paying the interest, but never the actual amount owed. Avoid Payment Protection Insurance (PPI) on a card or loan unless you have looked around and found no better deal. Invariably they will charge much more than an independent company.
If you have any savings or are putting money aside each month, don't. It is always better to pay your debts first and then start a savings account. The interest you gain on any savings will be swallowed by the interest charges you are paying on your loans. Make a phone call to your credit card company and ask for a better deal - you'd be surprised what they can offer you. If they cannot help then make sure you switch your credit card balance to one with a lower interest rate or even better a 0% interest card, even if it's only for a certain period of time - it'll help you clear that debt.
Loans
As with credit cards, many loans could be charging a high APR - especially if it is an unsecured loan. Get this paid off as soon as you can (unless it is on a fixed term - any early repayment charge may negate any savings you could have made). Search around and look at better deals with other lenders or even consider contacting your current lender and seeing if you can get a reduction in the interest rate they charge you.
If you have more than one loan, consider a debt consolidation loan to combine them all and repay it over a longer period of time. It could save you money and give you more disposable income each month after your outgoings. Just beware not to take on any new debts on top as this could put you in an even worse position a bit further in the future.
Reduce Your Bills
Switching the companies, deals or tariffs you have on your household bills can give you huge savings over the year. Spend a day and go through your bills and find out where you are overspending or paying for something you don't use.
- Gas and Electric suppliers
- Water suppliers
- Phone bills including mobile phones and broadband
- Insurance for your home, car, pets and travel
Your Bank Account
Make sure you are benefitting from any features you pay for with your current bank account. If you are not, the think about downgrading to a basic account. Many people pay £10-£15 per month for a bank account, for not much benefit. Also check the rate of interest. If it is negligible, consider switching accounts or even banks - it's easier to do than you think.
Hopefully you can save lots of money from all these areas of your life. Consider doing it regularly, just one day every few months could improve your life and finances dramatically.