| 1. Debt control
You can control your debts by not applying for any more credit cards or store cards until you have paid off your existing debts. Store cards may be tempting but they can cause serious money problems with interest rates of up to 25%. Cut up your most costly cards and consider a 0% balance transfer with another credit card provider. You may also be able to consolidate your debts into one loan, but watch out for the small print as you could end up paying a lot more than you are at present. Also, never take out payment protection insurance on a loan unless you think it is absolutely necessary. This can bump up your payments considerably and leave you with more money problems.
2. Change your mortgage
A mortgage is a bigger debt than most, but if you take the time to approach different banks and building societies, you may be able to change your mortgage to one with a cheaper interest rate. You may have to pay a penalty to your current lender if you want to switch mortgage, but it could still work out cheaper in the long run. If you are stuck with the same lender for whatever reason, try to overpay your mortgage and reduce the amount owed or ask them to freeze the interest rates or give you a payment holiday if you have debt problems.
3. Arrange your savings
Arrange your savings when you have the chance, and always try to keep the equivalent of 3-6 monthīs salary in the bank for emergencies. You can also gain a good rate of interest if you shop around, making more money for you while you save. Many debt problems start with people being made redundant, or through illness and injury. You should always have something to fall back on if this happens to you, so when you are fit, well and working, always try to put some by for a rainy day. Savers who can put money aside each month can earn high rates of more than 7% in a regular savings account.
4. Tax relief and debt relief
Always make sure you are not paying more tax than you need to, as tax relief can equal debt relief. If you have an individual savings account (ISA), then you should know that cash ISAs are tax free. You can also take out an equity ISA which invests in the stock market, and if you want to know more about ISAs, contact a financial advisor.
5. Household bills and savings
You can save hundreds of pounds per year by swapping utility providers, and reducing household bills. Check out the online comparison sites, which will compare prices of different utility providers in your area. Consider moving to dual fuel, which means you get gas and electricity from one supplier. Paying by direct debit can also help you reduce debt and save you time and hassle.
6. Making your money work for you
Current accounts can vary widely between banks and building societies, and by shopping around you can make your money work for you. If you need debt advice and free debt help, it would pay to switch bank accounts if you are being offered better rates elsewhere.
7. Pensions and saving to avoid debt
You can avoid debt in the future by taking out a pension scheme now. It is easy to put off pensions, and most people under the age of 30 think that pension age is a million miles away, but the more you pay in, the more you will get out. Pensions also offer good tax perks and provide the perfect way to save for the future. A company pension is always a good idea, because you can benefit from your employerīs contributions, but if you donīt have access to a company scheme, consider a personal pension to secure your future.
8. Identity theft and debt management
If you need help with debt management, the last thing you need is to be a victim of identity theft. You can take important steps to protect your details from falling into the wrong hands, and you should destroy all personal information, including credit card slips. Never carry your driving licence or passport with you unless absolutely necessary, and check your bank statements regularly. Never give your PIN numbers or passwords to anyone, and always change your password for each account. One of the most common ways to steal identities is to steal mail, so if you stop receiving mail, contact the post office as quickly as possible.
9. Household and car insurance
Donīt automatically renew household and car insurance with your current insurer as you could find it cheaper elsewhere. Compare insurance online or shop around to find the best deals. Debt management starts at home, so anywhere you can save money, check it out and you could find yourself paying a lot less over 12 months. Always read the small print if you are thinking of switching insurers, as you may find cheaper premiums but they could, in the long run, provide a lot less cover.
10. Where thereīs a will thereīs a way
Take some time to write or update your will, which will not only help you sort out your finances, but it will also save on inheritance tax. Donīt leave your family or friends seeking debt help in the future, by sitting ... |