Freelance writer, David Elliott, shares some financial advice on how to overhaul your personal finances in a single day!
It’s an unfortunate fact of life that if you find yourself with more money going out than is coming in then you’re going to start either building up debt or eating away at your savings, assuming that you have some. The crucial starting point for overhauling personal finances is to use a budget and stick to it on a daily basis. List clearly all the outgoings such as energy bills, money spent on food and other essentials and payments to insurance companies on the one hand - and your income on the other - and you’ll start to regain control of your affairs inside of a day.
Financial Advice: Cut the Bills
One of the best places to start putting your financial house in order is with reducing bills by going through every miniscule aspect of your outgoings with a fine-toothed comb. This applies to things like council tax and small daily purchases as well as to the more obvious mortgages and credit cards.
Financial Advice: Car Insurance
Car insurance can be very costly and the best way to reduce it is simply to shop around by using comparison websites and considering things such as cash-back schemes that some companies run. Never accept the annual renewal quote. If you find it cheaper you can always ring your current provider back and they’ll bend over backwards to reduce your premium and keep your custom.
Financial Advice: Credit Cards
Credit cards can be a real killer and you have several options here. You can lower the rate by doing a transfer deal or pay off the cards that carry the highest rate first, focusing all your resources on offloading these expensive cards before turning to the others. Of course you could stop borrowing on them. Credit cards can be very useful when used sensibly but are ticking time bombs otherwise. People have spent the best years of their lives paying for a few months of spending sprees.
Financial Advice: Energy Bills
With energy bills, again, these keep getting hiked up and you have to keep looking for better deals. Ring up your current provider and ask whether you’re on the cheapest tariff and they’ll immediately give you a better deal over the phone. The point is that you have to ask and they have to comply, otherwise you’ll stay on the more expensive tariff. This works with bank current accounts too. Often there are schemes available that give you a better interest rate, for example a few more percent if you deposit over £1000 each month, but you have to ask because they won’t volunteer such information.
Financial Advice: Techniques
Once you’ve decided on how to make savings on both bills and daily expenses like coffee and snacks, actually sticking to a budget you’ve already worked out can be the hardest part. It often helps to set up several standing orders with the bank so that each month when you get paid money gets automatically moved into different accounts to cover things like bills, holidays and shopping. If you decide you want to buy a new sofa or take a holiday, simply check the account and see whether there’s enough money available.
- David Elliott is a freelance writer who loves to travel, especially in Europe and Turkey. He’s spent most of his adult life in a state of restless excitement but recently decided to settle in North London. He gets away whenever he can to immerse himself in foreign cultures and lap up the history of great cities.