This money makeover could save you over £1900
Katy Ward shows you how simple changes in your everyday money management could save you a packet - £1938.17 in fact!
Luckily you don't have to be a financial whiz to make these kinds of savings. In fact, we could all benefit from a five step money makeover.
Read on to discover how much you could save by going Gok Wan on your finances.
Step 1: Draw up a budget
The first step is to know exactly what you're dealing with. This means going through your bank statements with a fine tooth comb and making a list of your income verses your expenses.
You might feel like a Scrooge but this is an essential step in any money makeover. If you're technically minded, you could keep this information on a nifty spreadsheet. Being an old fashioned girl myself, I prefer the pen and paper approach.
Now you can see exactly where you can make savings - you'll probably be surprised by the difference small lifestyle changes can make. Just by ditching the gourmet sandwich shop and taking your lunch into work you could make massive savings.
Savings: Spending £4 on a sandwich and crisps might seem like a nice way to treat yourself but it soon adds up - £20 a week, £80 a month and a whopping £880 a year (assuming you take your four weeks' holiday).
Step 2: Demolish your debt
If you're among the thousands of Brits in debt, don't panic. There are plenty of steps you can take to pay them off more quickly and for less.
For example, those who owe money on credit cards with expensive interest could apply for a 0% balance transfer credit card.
The interest on a typical credit card is around 16-17% (typical). However, a balance transfer deal will waive this interest for an introductory period. At the moment, the Virgin Credit Cardoffers customers a 16-month holiday from interest.
Bear in mind, however, you will need to clear the balance before the introductory offer expires or you could end getting hit with expensive interest.
Savings: Imagine your credit card debt is £3000 and you're making repayments of £200 a month.
Sticking with a credit card that charges 17% interest, you'll pay £364.37 in interest before you've cleared your debt. With a balance transfer deal, however, all you'll pay is a transfer fee of £89.40 - saving £274.97.
Step 3: Bust your bills
Taking a fresh look at your monthly bills is an important ingredient of your money makeover.
If you stay loyal to your utility and insurance suppliers, you're probably paying over the odds for your bills each month.This is because many companies only offer their most competitive deals as an incentive to attract new customers.
By sticking with the same supplier, you're unlikely to get the best deal. At the risk of sounding like a broken record, it's vital you shop around for the best deals.
Savings: You could save £430* by switching energy suppliers today. Shopping around for your home insurance policy could save you £122.03** and hunting down the best car insurance deal could cut costs by £126.17**.
Step 4: Make your money work harder
If you don't spend your entire salary each month, it's a good idea to build up a nest egg.
One of the easiest ways to do this is by taking advantage of a tax free ISA or an easy access savings account. To learn more about savings options, check out Serena Cowdy's article.
Even if you're not in a position to start saving, you could benefit by switching your current account. Most of us don't pay much attention to the interest on our current account but chances are it's pretty pathetic. That's why it makes sense to shop around for an account with a more competitive rate.
Alternatively, some companies offer cash incentives to customers who sign up for their services. Alliance & Leicester, for example, offers customers £100 when they switch to a Premier Current Account.
Savings: If you went with the Alliance & Leicester deal, you bag yourself £100.
Step 5: Get paid to spend money
Perhaps you wouldn't feel so guilty about treating yourself to a meal in an expensive restaurant or DVD boxset every now and again if you signed up for a cashback credit card.
All the purchases you make on one of these clever cards are rewarded by the provider with a proportion of the amount you spent.
An American Express Platinum Credit Card, for example, will reward you with five percent cash back on all purchases in the first three months (up to £100). After three months, you'll receive 1.25% cashback.
Remember, however, you need to pay off the card in full to avoid any interest.
And it isn't just credit cards, websites such as Top CashBack pay users every time they make a purchase via the website.
Savings: A £100 purchase with your American Express Platinum Credit Card could net you £5.
*At least 10% of our customers saved a minimum of £430 per year when arranging an energy transfer using our services during the period 1st August 2009 to 17th November 2009.
** The saving shown is based on the cheapest quote returned by the BeatThatQuote.com search engine compared to the renewal price provided by the customer.
**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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