| 1. Pay off your debts
If you have any spare cash, use it to pay off your debts. Money saved on your mortgage for example could be used to pay off credit card debts or store card debts or a bank loan.
2. Increase your mortgage payments
If you are benefitting from an interest cut, then why not put your savings towards your mortgage, which can help you avoid any unnecessary or unexpected debt in the future. You will own your own home quicker and you will stand a better chance of refinancing to a better mortgage rate.
3. Open a savings account
Any spare cash you have from interest rate cuts which affect your mortgage can be put into a high interest savings account. Treat this as your “rainy day“ money and you could earn as much as 10% interest on your money per year. Shop around for the best deals which will see you save money, and not have to worry about debt problems in the future.
4. Invest in the stock market
Take advice and consider investing in the stock market. The best way to make the most of a falling market is to make regular modest investments which won“t break the bank and could include equities and bonds. You could invest your mortgage interest cut saving on the stock market or in premium bonds. Alternatively, avoid debt and debt management solutions by investing your money in an ISA.
5. Payment protection insurance (PPI)
You could invest in payment protection insurance on your existing mortgage or bank loan, which would give you some breathing space if you are made redundant or suffer an accident or injury at work. PPI will normally pay for 12 months of your mortgage if unexpected events leave you without an income, but make sure you read the small print first. Thousands of PPIs have been mis-sold over the past few years, and you can now reclaim money spend on these schemes through reputable and regulated debt advice companies.
6. Invest in your children
If your child was born after 2002, they are automatically given a non-refundable Government trust fund voucher which they can access when they are 18. Help to make their future easier by opening or adding to a child trust fund which is tax-free. The maximum amount which can be paid in to a child trust fund is £100 per month, but this can accumulate to more than £35,000 in the next 18 years. Don“t overstretch yourself if considering a child trust fund or you could end up in debt yourself, but start by paying a modest amount in each month.
7. Pension fund investment to avoid debt
Invest in a pension fund if you have any spare cash, and you will reap the rewards in later life. There are plenty of pension options available to you so take your time to find the right one for you. Beware of investments that carry a lot of risk, or you could find yourself experiencing debt problems and seeking debt advice or even arranging a debt management plan.
8. Consider a health cash plan
Health cash plans can reduce the amount you pay for health treatments. Similar to health insurance policies, health cash plans are less expensive and can be used against medical fees and expenses for opticians, dentists and doctors. With a cash plan scheme, you pay the initial expense of treatment and then claim it back from your cash plan provider.
9. Private school fees
If you are planning to send your children to private school, you can start to save the money early in a tax-free insurance policy until your children reach school age. You may also be able to pay fees early at the current rate which will assure your child“s place at private school in a few years time. Millions of people in the UK are suffering debt problems and seek free debt advice and help every year from free debt solutions companies who can arrange debt management plans, independent voluntary arrangements and even bankruptcy.
10. Shop sensibly to avoid further debt
The Government is hoping, by cutting interest rates that the general population will be out there shopping in the high street again, and spending the money they have saved on the mortgage. If you already have credit card debts or bank loan debts, give the plastic a break and spend some available cash instead on the basics. Alternatively, use the extra money to pay off some of your credit card debts to make life easier.
Debts.org offers people with debt problems a way out. Offering free advice and guidance about debt management plans, Individual Voluntary Arrangements, bankruptcy, reclaiming unfair bank charges, reclaiming mis-sold payment protection scheme cash or simply offering a shoulder to cry on, debts.org helps people in debt in every major town and city in the UK, including Liverpool, London, Leeds, Swindon, Poole, Blackpool, Burnley, Liverpool, Ipswich, Telford, York, West Bromwich, Peterborough, Stockport, Stoke, Brighton, Gloucester, Watford, Rotherham, Sheffield, Cambridge, York, Nottingham, Leicester, Manchester, Bristol and Birmingham. Call us free for free advice on 0844 277 7999 or fill in the online form. |