Save Money - Examine Your Mortgage Deal
This is likely to be your single biggest cost, and therefore has the potential for the biggest saving. The large amounts involved mean that even a small difference in interest rates can have a significant impact on what you pay. The fact that you are going to be paying it for so long is another reason to examine it closely and regularly. A relatively modest change per month could save you thousands over the term of your mortgage.
Start by asking your existing lender for a better deal – that would be less hassle than changing to a new lender, so it is well worth a try. Some lenders are less desperate to keep your business than they used to be before the credit crunch, but many would still be happy to improve your deal rather than lose your business.
If you do consider changing to a new lender, you will need to know if there are any penalty charges for leaving your current mortgage early, as this will need to be allowed for when you are calculating what you might save. Ask your lender to confirm the total costs involved in closing the mortgage. You must also consider legal costs and any fees for setting up the new mortgage.
Save Money – Pay Off Debts First Instead of SavingThis feels counter-intuitive when we are always told we need to save more money, but it does not make financial sense to put money in the bank if you have debts that are costing you money in interest. Pay off your debts first.
The rationale behind this is very simple – the interest you pay for borrowing money is ALWAYS more than the interest you will get from having money in the bank (with the odd exception such as special short term offers on some credit cards). This has to be the case – it is the basic operating system for banking. They give you a bit of interest for the money you deposit with them, so that they can lend it out to someone else and charge more money. The difference between the two rates is their profit.
When you are planning to pay off your debts, always tackle the most expensive ones first. Look at the interest you are paying and use this to work out a priority order for paying them off.
Save Money - Review Your Energy Suppliers
You really do have to keep a close eye on your gas and electricity supplier these days. This is a constantly shifting field and you need to compare the rates about every six months or so. Try to leave it until just after there has been a big price change. Once one supplier changes their prices, the others usually follow in a few weeks, then it should be fairly stable for a while and that is the time to change.
The easiest way to compare prices is on one of the comparison websites. They make it very easy to swap now, and you can often get incentives for changing through them, such as cash back or vouchers.
It is usually cheaper to pay by direct debit, but you should always check your actual meter reading every month rather than rely on the company’s estimates. They seem to go for ages without bothering to read meters at the moment, and their estimates can be wildly out, so to avoid being lumbered with an unexpected bill a year down the line, check what you are actually using, give them your meter readings, and pay the correct amount.
Save Money - Credit Cards
This is a huge area and I could write many articles on credit cards alone, but for our purposes here, the main point is that you should not sit back and just make the minimum payment each month. Ideally, you need to try to pay your cards off in full each month. If you can’t do that, you are storing up problems for the future.
Assuming you do have some debts on credit cards and can’t afford to pay it all off in one go, you should at least set up a direct debit to make a fixed payment each month, based on the very most that you can afford. The credit card companies want you to just make the minimum payments, because then you pay them interest for a very long time, which is how they make their money.
The extra cost to you in just making the minimum payments is huge – the less you pay each month, the longer you take to pay them off and the more interest you pay. The other advantage of setting up a direct debit to pay your cards is that you make sure you don’t miss any payments by accident and incur any needless penalty charges.
Save Money - Shopping for food
The fact that you go shopping so regularly means that it is a very substantial cost when you look at it over the course of a year. We all have our favourite brands and reasons for choosing one make over another, but with the advent of supermarket own brands and now economy brands, there is a huge price difference available on what are often very similar (if not identical) products.
Research shows that if you can drop one brand level on all your shopping, you will save about one third on your shopping bill! I think that is a stunning statistic, which will have a massive impact on your pocket. You don’t have to change to the economy version of everything, just experiment with dropping one level. If you normally get luxury, get standard, if you normally get own brand, try economy.
In my experience, the difference between products will vary from quite noticeable to non-existent. Just make sure you are judging objectively, and not making your mind up before you taste it because of your expectation. Blind tasting is preferable if you want to do it properly.
Depending on your current situation, following the above advice could potentially save you a very sizeable amount of money over the course of a year. For people who are getting into some debt, this sort of expenditure management is well worth the effort as it can be enough to put a hold on the level of debt and help you climb back out. Debt has a habit of increasing and spiralling to crisis level if not tackled early.
