1. Avoid Late Payment Penalties. Don’t be hit by penalties for late payment. Make sure you always pay off at least the minimum on your credit cards. A good tip is to set up a direct debit so that your payment can never get delayed in the post.
2. Arrange Overdrafts First. If you are going to go overdrawn try to arrange an official overdraft or take out an emergency loan. This will save a lot of money in penalty charges. Also it will protect your credit rating.
3. Don’t accept penalty payments. If you do miss a payment by mistake or go slightly overdrawn then the bank might agree to give you the benefit of the doubt. If you have been charged; the first thing to do is to write to the bank or phone and explain there was an unfortunate mix-up, due to getting lost in the post (or some other excuse) the payment was unfortunately late. Quite often the banks will agree to retract the penalty charge and not harm your credit rating. The important thing is that it is always worth trying, banks do actually want to create a good brand image, (even if it might not seem like it all the time)
4. Move Credit Cards to 0% interest. If you have a credit card debt, the standard rate will probably be over 15%. However many credit card companies offer 0% balance transfers for the first 6 or 9 months. This is definitely worth doing. When the 6-month period ends, just move it to another credit card company. Some credit card companies may have a 2% balance transfer charge. However this would still work out at an average annual interest payment of 3% (on a 9 month balance transfer) so is definitely better than staying at 17%.
5. Move Debt to Lowest interest Rate. If you are unable to do the above, at least move your debt to the lowest paying interest account. If you are paying interest on a credit card at over 15% there is probably a much cheaper way of borrowing money. Take out a personal loan, which may be half the cost. If you are a homeowner, consider Remortgaging or taking out a loan secured against the value of the house.
6. Try to limit your debt. Look for manageable ways to reduce unnecessary outgoings. Try to budget your spending so that you don’t spend excessively. It is quite easy to underestimate how much you spend on going out, buying clothes e.t.c. It is worth keeping track of knowing how much you spend. Often when people realise how much they spend on takeaways, clothes e.t.c it is quite a shock and they wish to reduce their spending. Don’t live in denial about your high spending habits.
7. Find Best Deals. Take time to search for the best deal. For things like utility bills you can probably save significant amounts of money by switching to a cheaper deal. Use the Internet to find the best deals available online.
8. Small savings add up. If you pay your bills by direct debit, usually you get a small discount. Also some firms encourage you to switch to paperless bills, e.g. BT give a small saving (25p) for doing this. All these small savings combined can make a big difference.
9. Avoid Impluse Buying. Before buying something ask yourself “Do I really need this”. If you find your shopping can easily get out of hand. Try to ask yourself “how often will I use this?” If you can sincerely say that you will use it / wear it often then it will be a good purchase. However if you already have 88 pair of shoes, you have to be honest with yourself and say maybe the 89th pair isn’t of the highest priority.
11. Don’t have kids… children will cost you an average of £200,000 each during their stay at home, not to mention the endless taxi services. Of course non-economists may say finance isn’t the only important thing in life…
All these things can help you save money, reducing your financial stress and allowing you to enjoy the things that really matter.