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10 tips on sensible financial management to save you money
31st July 2008
Managing your finances can be difficult at the best of times, especially in the current financial climate. However, there are ways in which you can ease the strain by managing certain aspects of your financial processed more sensibly, and you will be surprised at what a different this can make overall. Below you will find some valuable tips to help with effective financial management ranging from paying your mortgage to being more savvy about your loans, credit cards, and savings.
1. Overpay on your mortgage: Whilst you may think that you have plenty of other things that you would rather do with a spare £100 a month, by paying this amount in addition to your monthly mortgage repayment you could cut the repayment period by over five years, and could save around £25,000 in interest overall, which is well worth paying a little extra each month and will save you a fortune in the long run.
2. Get rid of your credit card debt: Whilst credit cards offer convenience, ease, and flexibility, they can also be the most expensive form of borrowing for many consumers. You should aim to enjoy the convenience and ease of using a credit card but try and pay back the balance in full each month. If you cannot do this you should consider an interest free credit card or even a low rate personal loan as an alternative means of borrowing.
3. Don't let your savings go to waste: If you have some money lying around in your current account or in a low rate savings account, and you have an ISA on which you still have some allowance left out of the £3000 maximum tax free cash allowance then use the money to top up your ISA and enjoy far higher returns on your hard earned cash.
4. Make sure you get what you are entitled to: A surprising number of people have no idea what benefits and allowances they are entitled to. Make sure that you are fully aware of any benefits and awards that you are entitled to and take the time to get your claim in for them.
5. Pay your insurance premiums in full: Many people pay their insurance premiums for all sorts of cover on a monthly instalment basis, but you may be getting charged a fortune in interest for doing it this way. See if you can start saving upfront for your premiums and you could save hundreds of pounds a year in interest overall.
6. Avoid payment protection cover if you do not need it: Payment protection insurance cover can be very costly, and in many cases the consumer does not need it and cannot even benefit from it. Thinks carefully before you take this cover with any form of finance, and if you do want it make sure you shop around.
7. Don't shell out extra for extended warranties: You will often find yourself at the receiving end of sales banter when the assistant tries to sell you extended warranties on products that you have purchased. Don't bother wasting your cash, especially if the product is cheap, as it will probably be better to take your chances and replace it if it does break down.
8. Think about debt consolidation: If you have a lot of different debts, and you are paying a fortune each month on your debts, you could find that consolidation them with one lower rate consolidation loan could be far more cost effective. Check and see whether you can save money through consolidation.
9. Take up a cost effective hobby: If you find that you tend to spend a lot of time going out to the pub, for meals, and to other costly places to kill time then consider taking up a hobby that you enjoy and that will take up time without costing you money, such as fishing, painting, or any other hobby that doesnt involve putting your hand in your pocket every five minutes.
10. Review your finances: Check through your financial outgoings on a regular basis to see if you can save money each month. This could include switching certain products and services from one provider to another in order to save money.
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