With economic austerity still in place and some of the effects of the Brexit vote meaning higher prices in the shops, many people are finding it hard to stretch their income as far as they’d like. If you’re looking for ways to save money on your outgoings or want to raise some money for a holiday, new car or home improvements, before you talk to the bank about a loan, have a careful check on all your spending. You might be surprised by how much more you’re paying out each day than you need to.
Credit cards and loans
It’s been relatively easy to accrue quite a collection of different credit cards and store cards over recent years, and many of them come with very tempting introductory offers and discounts. The problem is that unless you pay the balance off every month, you will sooner or later start paying interest on your debt, and that can work out to a fairly hefty sum. When you have small debts spread over several different cards, it can be tricky keeping an eye on them all and spotting the ones that are costing you a lot in interest payments. There could be hundreds of pounds being lost this way every month, so it really is worth going through your statements to check your current interest rates and seeing how much the repayments are currently costing.
One way to deal with instances where credit cards are costing you a lot is to find a balance transfer deal that will let you shift your debts onto a new card that has reduced charges for transfers. You’ll find that you’ll have to pay a transfer fee or opt for a free transfer at a low-interest rate. This can work well if you are able to clear the debt before the free or reduced period ends, but once it does you’ll be back on a higher rate – sometimes higher than equivalent cards on which you hadn’t done a transfer. Another way to manage lots of odd debts is to consolidate them into one loan through a company like Bonsai Finance. This way you will have a fixed repayment schedule and won’t run into the problem of interest rate rises.
Check all your bills
If you’re not in the habit of checking and switching when renewal time comes around, you could be losing hundreds or even thousands of pounds per year. Energy suppliers, insurance, broadband and telephone and mobile contracts are the key accounts you need to be checking on a regular basis. You can use a price comparison site to see what deals you could get for all these contracts, and there are now many to choose from. Bear in mind that they don’t show every company, particularly for insurance, so you might want to check the websites of businesses that aren’t on price comparison sites. Always be honest and accurate when filling in your details, or your policy could be void if you make a claim. It’s best to wait until you are ready to switch before doing a price comparison, as you’ll find quotes can often go up quite considerably between inquiries. If you find it a bother doing all this yourself, there are some new services coming on to the market that will hold your information and then alert you when you should switch.
It’s also worth having a try at negotiation; your existing contractor may be able to offer you a better deal if you can show them what you could save by switching. This works for phone and Sky TV contracts too, so don’t just accept the price you’re quoted – if you tell them you’re going to leave, you might be surprised at how much the bill gets reduced to! You should also check other household bills like council tax. Make sure your property is on the right band, and that you are claiming the single person allowance if you are a lone parent or live on your own.
Benefits and tax
Every year there are millions of pounds worth of unclaimed benefits, because people don’t realise they could be entitled to them. The key benefits to check if you’re working are child tax credits and working tax credits. You can fill in a calculator on the tax credits website to show you if you could be entitled to these benefits, and there are also tools available that will show you what other benefits you could be entitled to. This is money that has been put aside to help people when they’re facing difficult circumstances, and are designed to help you keep working whatever your situation. It’s also worth checking your income tax to make sure you’re on the right code and haven’t been paying too much. You can check back historically on this too, and there are many cases of incorrect codes being applied over the years or at certain times in the past that have resulted in quite substantial reimbursements. There are other tax benefits that you might be missing out on, such as the married person’s allowance. Also, if you or your partner doesn’t earn enough to reach the lower limit on personal tax, the balance can be transferred to the other partner for them to use against their income.
You can see from these examples that without cutting back or compromising on anything in your life, you could be saving hundreds if not thousands of pounds a year. You could easily get back the cost of a family holiday by checking on all the items listed above. If you wanted to save even more, there are many ways to reduce what you spend, too. There is also a range of ways to earn a little extra income too to boost your bank balance. If you’re feeling the pinch and wondering what to do, try these tips for saving cash first, then see how this affects your income before taking the next step on the road to better financial security.