After getting some budgeting advice from Moolr, if you still feel that you need debt help, rather than a loan, then please speak to a debt management expert for no obligation, impartial advice. Moolr have collated some tips in the meantime ot make your pennies go that little bit further.
The main tip, around which this article is based. Budgeting should be an important part of everyone’s lives, regardless of whether you have debt worries or not. However much money we think we have spare, it is often the case that this is not the true figure. Take time to list your incomings and outgoings, so that you know week-by-week how much you have to spend, and this will help you to ensure you don’t spend more than you have, and therefore get yourself in further debt. Why not go one step further, and list everything that you spend money on? By doing this, and comparing it to your budget, you know if you are on course for having a positive balance on your salary.
Before rushing in to a purchase, shop around. You may find the same product or service on a different website at a cheaper price. Decide whether you really need to make the purchase, and remember, by shopping around, you stand more chance of finding a company with a sale on. Rather than using high street stores, use sites such as eBay to see if what you want is cheaper there.
Be sure to look at one of the many discount websites, such as myvouchercodes.co.uk or Google the phrase “online vouchers” and you will find more. These sites are dedicated to bringing you the very latest money saving vouchers and deals, direct from the companies. You often find that by simply typing in the voucher code from these websites, that you can save up to 75% of the original price. Use cashback sites to get money back on purchases.
If you have one or more credit cards, look into other credit cards that have interest-free balance transfers. Many offer several months of interest free purchases or transfers, and in this time, the money you save can be put towards paying off the balance, thus getting you out of debt sooner. It is important to remember though, that most credit card companies charge you a fee for this service, so try to make sure that the money you save is more than the fee charged. Also it is imperative that you destroy the credit card that you are transferring from, otherwise the temptation will be there to continue to use it, and this will put you much further into debt.
If you have a loan, look at the terms and conditions, and see if you can pay the debt early, without facing a charge. See what Moolr can offer, as you may well be able to find a loan with a lower interest rate, therefore saving you hundreds of pounds.
If you are a homeowner, why not search around for competitive mortgage deals? There are thousands to choose from, and the chances are that one of them could offer you a much lower rate of interest and save you thousands over the term. Research the different types of mortgages available. Is a flexible deal right for you? If the Bank of England base rate increases, can you afford the higher repayments? Staying with your current lender only benefits them, and not you. Before re-mortgaging, please check the terms of your existing deals, as many companies will charge you an excessive amount if you leave within a certain tie-in period. Look for companies that offer overpayments – if you are lucky enough to receive extra money, you can use it to pay off what is normally the largest debt you will ever have, without a fee. Even by saving £50 each month on your 25 year mortgage, you are saving a massive £15,000 throughout the term.
Search around for a better home phone rental. There are many companies around available to provide your phone calls, and you may be able to save hundreds of pounds per year. If you have a mobile phone, ask yourself if you really need both. Should you decide you don’t, work out which is the cheapest to have, and cancel the other. If you have a contract mobile, look at the number of calls and texts you make each month, and consider purchasing a pay-as-you-go mobile. Should you need a contract phone, haggle with your provider – they’d rather keep a £25 a month contract by offering you more minutes or texts at a lower price than to lose your custom altogether. You’ll be surprised just how much you can get out of them. If your phone is still functioning when you are ready for an upgrade, retain the phone and get a cheaper sim only deal.
Unless you are consolidating your debt at a lower rate of interest, you must not be tempted to pay off one form of credit with another – this method can only have disastrous effects on your finances. Instead, an important piece of debt advice is that if you have any savings, or if you ever receive a lump sum from inheritance money, work bonuses, or gifts, you should use this to immediately put towards the debt with the highest rate of interest. This will help your monthly disposable income, and help you work towards becoming debt-free. Don’t pay off the biggest debt automatically, but pay off the debts that have the highest interest rates.
Do you ever choose a black cab to get home at night, or after visiting a friend? A black cab can often prove much more expensive than a normal cab. Think to yourself, do you even need a cab? How long is your journey? Could you get the bus? Where at all possible, and safe, choose to walk, cycle, or get a bus to your destination, and the money you save when compared to using a cab will soon add up.
For many people, debt advice is sought because outgoings are greater than total income. Budgeting can help you pinpoint those regular outgoings that are not required to help maintain the balance. You may find that you can still buy the occasional “luxury” item – you need to establish what spending is essential, what things you can buy cheaper, and what things can be an occasional purchase, rather than a monthly purchase if you have enough money left over. It is tough to have to make sacrifices and miss out on “treats”, but the upside is greater. That upside is financial peace of mind.
If you are buying something that is not essential, remember the four day rule. If part of you is unsure about making the purchase, due to financial constraints, or even simply if you are not sure about the product, wait four days. This will give you plenty of time to research alternative, cheaper similar products, or perhaps to decide that you don’t really want or need the item after all. Remember, impulse purchases are often a waste of money.