When it comes to managing money, most of us could probably do with a helping hand sometimes. Beat your bad money habits with these quick and simple tips.
From paying bills a bit late, to forgetting to cancel services and subscriptions, to not shopping around for the best deal, we all make the odd mistake that can end up costing in the long run.
But beating bad money habits doesn’t have to be hard work – here are some simple things you can do to make your wallet happy.
How much are you spending?
Do you know where your money goes? The morning coffee, the mid-week supermarket trip, weekend brunch – it all adds up. Try tracking your spending for a few weeks or a month to see what patterns there are.
You can use something as simple as a pad of paper or a simple note-taking app on your phone. You might be surprised at how much you spend without realising it – especially if you have embraced contactless cards.
Pay expensive debt first
Credit cards and store cards can be useful, but they’re a comparatively expensive form of debt. If you have credit or store card balances or a loan to repay, then make this a priority. If you can afford it, clear any debt as soon as you can.
For example, if you use a credit card for internet purchases, be sure to pay off as much as you can each month to avoid potentially costly interest charges.
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Don’t forget to pay yourself!
If you’re saving for a goal – or even just for a rainy day – then don’t lose sight of it. It’s too easy to think that you’ll pay in what you can afford at the end of the month, but consider setting up an automatic transfer from your current account to a savings account or ISA on or just after pay day.
This way you’ll make sure you’re putting money aside and won’t be tempted to spend it. But don’t forget to reward yourself – build in savings goals and set rewards to keep yourself motivated.
Opt for direct debits
Where possible, it’s usually a good idea to pay bills by direct debit. This will make sure you pay bills on time. But beware that sometimes, it can work out more expensive in the long run to pay big, upfront costs like car insurance monthly than in one go.
It’s also a good idea to go through a few months’ bank statements to see if there are any direct debits you might have forgotten about, like magazine or service subscriptions that you no longer use but are still paying for.
Switch your service providers
Everyone knows that they should shop around and switch providers to get a better or cheaper service, and it looks like the message is finally getting through. According to Energy UK, the trade association for the UK energy industry, 4.8 million households switched energy provider in 2016, up by 26% on 2015.
Depending on what you’re looking to switch, you could make considerable savings. For example, by some estimates, switching utilities providers could save several hundred pounds a year.
Mobile phone contracts can be expensive, largely because the cost of the ‘free’ or reduced price handset is actually factored into the monthly contract.
But if you don’t want the latest flagship handset, a sim-only deal can work out much cheaper while giving you a comparable amount of data, calls and texts.
Many sim-only contracts are also available for one or 12 months, compared to the 24-month term that has become the norm when buying with a handset.
For longer term goals, we’re here to help
If you’re saving with a specific goal in mind, our financial objectives tool could help you with your plans, and it only takes a few minutes.
Enter the amount that you want to save, when you’d like to reach your goal, how much you can afford to contribute each month and what kind of interest rate you expect on your savings, and the tool will tell whether your plans should meet your target.
The tool allows you to make an appointment to speak to one of our expert financial advisers and explore whether taking tailored financial advice could be the right option for you.
Retiresavvy is brought to you by Skipton Building Society. This article has been commissioned by retiresavvy and any opinions voiced are the author's own.