Take Control Of Your Finances
1) Calculate, Calculate, Calculate!
The first step is to know exactly what its you owe and who you owe the money to. Be as open about it as you can otherwise there will be even more pain later. Your debt should not account for more than 20% of you monthly income. If it is, you are entering the danger zone and MUST take immediate steps to cut back.
Once you calculate exactly how much you owe you can devise a budget, including a schedule for repaying your debts. Be realistic and calculate what you can afford to repay and still stay within your budget.
Don’t borrow any more money or take on any more debts until you have repaid what you already owe.
4) Daily Spending Control
Give your card to a trusted friend of family member (don’t include the PIN!) for safe-keeping. That will reduce any spontaneous spending splurges. Take a fixed amount of money out of the bank at the beginning of the week so you can only spend what you have.
5) Organize Bills
If you haven’t done so already, make sure you are paying all your utility bills by direct debit. It’s much easier to manage as you won’t have to worry about sending cheques on time and it is also cheaper as most providers offer discounts for direct debit payments.
This is probably the easiest way to cut your bills. You can do it today simply by calling your bank with the details of your energy suppliers. Or, alternatively, most energy bills enclose a form to fill in to set up a direct debit.
6) Switch Utility Suppliers
You can save hundreds of pounds each year on your gas, electricity, water and phone bills by switching. It is advisable to switch your energy and phone suppliers before you set up direct debits or you will end up having to change them again. Ask your neighbours who their supplier is and how much they are paying to compare.
7) Switch to a Cheaper Credit Card/Loan
Find a better rate by trying out different providers. You’ll most likely find a credit card or loan with a better interest rate than what you’re paying now. Be careful of special-offer rates as this will usually mean that the 0% interest advertised changes after a few months which will mean moving companies again. It might better to stick to a low-rate that looks stable than one at 0% for a limited period. If you decide to go for a 0% rate, make a note of the date in your diary of when you need to change deals again.
8 ) Cut Up Store Cards
Store cards charge by far the highest rates for credit, so if you’re finding it hard to manage these debts throw away your cards now to avoid temptation. You’ll pay well over the odds for most store cards – it’s better to pay cash if you can. For those items you can’t pay cash for, shop around for the best deals – the market is competitive, so there are some excellent interest free credit offers around. It is also worth taking a look on the internet as many products are offered there more cheaply.
9) Switch Your Mortgage
Mortgages are most peoples’ biggest expense each month. It’s imperative you have the best possible deal. Speak to an independent financial adviser or a broker about your options and if its possible to save money by switching.
Some mortgage providers have transfer charges so make sure you take these into account. Calculate the full cost of remortgaging before you decide its worthwhile. You may find the savings you’ll make with a new mortgage will more than cover any transfer expenses.