Times are tight all round, but if you are currently using a debt management company to help you pay off unsecured debts, then it can feel like you never see any of your hard-earned money. But worry not, for with a few savvy adjustments to your spending habits, you can claw back some of your cash to spend on the things that make you happy, whilst at the same time paying off those credit cards. Here are the top five tips to maximise your money whilst paying off your debts.
Before you start, it’s important to get the right debt consolidation program for you.
1. Be honest with yourself
- As with any decisions regarding your finances, you need to carry out an honest appraisal of your expenditure. It may seem elementary, but first write down all of your outgoings so that everything is accounted for. Next, you need to divide them into two groups: ‘Essential’ and ‘Non-essential’.
- For the non-essentials, you need to decide whether you are getting your money’s worth or not: gym memberships and magazine subscriptions which are used frequently can be good value for money, yet if your trainers have never touched the gym floor and you have a stack of unread Economists up to your waist, you might want to re-think these.
2. Compare Suppliers
For the things you cannot live without, you can find out if you’re getting the best deals by shopping around.
- A closer inspection of your gas, electricity and water bills and an online comparison of your usage against competitors’ tariffs could yield big savings if you switch suppliers.
- A report from This is Money found that being on the wrong mobile phone tariffs wastes £5bn every year in the UK alone. Proper research into tariffs could save the average person up to £194 per year.
- Ask yourself if you really need all the channels that come with your Sky package. Switching to Freeview and supplementing it with LoveFilm or a Netflix account could save hundreds of pounds a year with no loss in choice of entertainment.
3. Go Green
A way of further reducing your utility bills spend is to minimise unnecessary waste. Installing a water saver in the cistern, turning off the tap when you brush your teeth, taking showers instead of baths are all good ways of reducing your water usage.
To make big savings on electricity, install solar panels and ditch the tumble dryer in favour of a heated clotheshorse. This could cut hundreds off your electricity bills, whichever supplier you are with.
4. Eat (and Drink) Wisely
Food and drink expenditure can be a hard one to keep track of. When we buy food every day it’s easy to let spending escalate, but there are a few small adjustments you can make that could save you hundreds of pounds a year.
- Doing one ‘big shop’ at the beginning of the week and making a meal planner can help to keep you from deviating from your weekly shopping budget.
- Switching to supermarket own brands on things such as washing powder, cereals, and so on will also help the savings stack up. You should never deny yourself all luxuries but be honest with yourself about where you could make the switches by trying out a supermarket’s own over your preferred brand. You might be pleasantly surprised.
- Shop-bought lunches are costly. Switching to homemade lunches could save you up to £100 a month.
- Signing up to services such as Vouchercloud and Vouchercodes will give money saving offers at a range of restaurants, so when you do eat out you can do it without the guilt.
- Ditching shop bought coffees for instants or bringing a cafetiere into work could see you saving hundreds of pounds each year.
- Cutting out unnecessary mid-week drinking could save you a small fortune. Switching pub drinks for a drink at home will cost around a third of the price, or cut out the alcohol all together and do your body some good.
- Shop around for deals. In tougher times, retailers are at pains to get you to spend in their stores. Sites like HotUKDeals, Deal Monster and Money Saving Expert bring all the best retail deals together to help you get the best value for money on your purchases, leaving you more money to save or for bigger purchases.
5. Financial products
Many forget that our bank accounts and credit cards are products too. So like everything else, shop around for the best deal.
- Some current accounts incur high charges for going overdrawn or using an overdraft facility. Look for interest free overdrafts.
- Premium accounts with added benefits, such as LoveFilm subscriptions or Mobile phone insurance may represent good value for money but only if you use the services. If you don’t, then they need to go.
- Insurance is also an important one to get right. The right balance between the premium and excess depends wholly on you and your possessions. Work out what’s important and what you could afford to pay if the worst were to happen.