The beginning of the year is often a prime time for thinking about making changes to the way you manage your money. But it’s not the only time to take stock. Sometimes the smallest of changes can make the biggest difference to your finances. Here are ten easy ways to get more from your money
Ten easy ways to get more from your money
It’s not all about cutting back on spending, but that’s a good place to start. Set yourself goals so you’re more likely to stick to it:
1. Cut back on spending
If you want to succeed at cutting back, it’s no good to just have a vague goal of spending less. It’s much better to set short term and achievable goals. This could include spending £20 less a month on sandwiches at lunchtime or spending £50 less a month on going out. Give yourself a (low cost!) reward every time you reach a goal and set a new one.
SAVVY TIP: If you don’t know where your money is going, keep a spending diary for at least a month. There’s more about this in the article called Using a spending diary; how to spend less.
2. Save more money each month
Again, make this as easy as possible. Don’t stress too much about the account you start off with. I’ve had emails from women who put off starting to save because they’re worried about missing out on the best rate. It’s more important to get started. Once you’ve saved £1,000, or once you’ve been saving for six months, shop around for the best account.
SAVVY TIP: Set up a standing order and choose an account where it’s easy to see how much you’re saving as that will motivate you to carry on. You can find competitive savings accounts in the best buy tables section of SavvyWoman (these are best buy tables supplied by the website Savings Champion).
3. Pay off your debts
If you have credit card debts and can switch to a 0% balance transfer deal, that will be the cheapest option. Make sure you pay off the debts before the 0% term ends.
SAVVY TIP: If your credit score isn’t good enough to get a 0% deal, pay off the debt with the highest interest rate first. That will help you clear your debts quicker. There’s more on this in the article called How to pay off your debts double quick.
4. Look for a better paid job
Getting another job may be the answer but it could be that your existing employer isn’t paying you what you deserve.
SAVVY TIP: Asking for a pay rise in the current environment is tough but there are tricks to maximise your chances of success. Read more in the article called How to ask for a pay rise – and get it.
5. Get the best insurance cover
‘Best’ doesn’t necessarily mean ‘cheapest’. Some insurers are keen to make sure their policies look the cheapest on online comparison sites but either the policy is quite basic or they cherry pick people who are the lowest risk. It’s also worth looking at whether you have enough insurance, from contents insurance to life insurance.
SAVVY TIP: Life insurance is fairly cheap — it can cost as little as £10 a month to insure a £200,000 mortgage for someone aged 35. If you have a joint mortgage, have children or are receiving child support or maintenance, it’s worth considering. Watch my video called: What is life insurance?
6. Cut down insurance costs
Don’t stay with the same insurer. Your loyalty won’t be rewarded. Shop around, but don’t just opt for the cheapest policy. It’s really important to check exactly what cover you’ll get. Also, be very careful about any assumptions that are made about you (how high an excess you’ll pay etc).
SAVVY TIP: Compare the deals from a comparison website with your existing insurer and contact a good independent broker as well. If you’re looking for contents insurance, read my checklist on Choosing contents insurance; how to save money on contents insurance and get the cover you need. There’s a similar article explaining Saving money on buildings insurance; what to look for in a buildings insurance policy.
7. Shop around financial providers to reduce charges
It’s definitely worth looking at what you’re being charged in interest by your credit card if you don’t pay it off in full every month and at how much you’re paying in bank charges.
SAVVY TIP: Don’t apply for lots of deals/loans or accounts if you’ve been turned down by one provider as this will count against you. It’s better to get hold of a copy of your credit report before you apply. That’s in case there are any nasties or mistakes on it. It’s also a good idea to choose a credit card that you have a reasonable chance of qualifying for. You can normally find out in advance whether or not you’ve got a good chance of qualifying for a credit card. Noddle and Experian offer these services, as does Confused.com and some credit card providers.
8. Start to sort out or improve your pension
With the stock market falling and many companies closing their final salary pension schemes, it’s easy to think that pensions are a waste of time. But if you’ve not started your pension or don’t pay much into it, you need to ask yourself ‘what will I live on when I retire?’. If you don’t have a plan you may end up living on the state pension and little else.
SAVVY TIP: Currently more women than men end up in poverty in retirement. It’s partly because women are more likely to work less or give up work altogether to bring up a family, but women also tend to be less keen to lock money away (which you have to do with a pension). There are lots of articles on how to get started with a pension in the section called Pensions and retirement.
9. Take more control over your investment decisions
If you have money in a workplace pension that’s not a final salary scheme, do you know where it’s invested? Around 80% of people who join a stock market linked pension scheme from their employer invest in the ‘default’ fund which may not be the best option for you. There’s more about What’s in your pension? Understanding workplace default pension funds in the section entitled ‘pensions and retirement’.
SAVVY TIP: If you have other investments, such as stocks and shares ISAs, make sure you don’t follow the herd. Often, funds that are flavour of the month one moment are yesterday’s news the next.
10. Change your bank account
Changing your bank account should be straightforward now that seven day switching has been introduced. The rules changed from September 2013 so that the bank you’re switching to has the responsibility to make sure the whole process works smoothly from start to finish.
SAVVY TIP: If you’re thinking of applying for a mortgage or other credit and you’ve changed your job or address, it’s better not to switch your bank account at the same time. Having your bank account with the same bank for several years can improve your credit score.
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