Five ways to ditch your financial bad habits
Feature
by Nathalie Bonney
1. Stop credit card debt spiralling out of control
Credit cards can be a useful tool, if you use them in the right way - to make a one-off expensive purchase or transfer existing debt onto a 0% balance transfer card, for example. But it's too easy to rely on cards for everyday spending.
So try and pay off your balance each month, and if this isn't possible, look for a 0% balance transfer card and aim to pay off the total amount during that period. Avoid making only minimum repayments: it will take you a lot longer to pay off the debt, plus the total amount you repay will be greater.
2. Don't neglect your savings
If you're lucky enough to never stray into the red on your bank balance, make the most of this by moving your money into a savings account or ISA.
Current account interest rates are minimal but shop around: for example, you could earn 4.65% on your cash if it's tied up for five years in a fixed-rate bond with Birmingham Midshires. Moving money out of your current account also means you'll be less tempted to spend it.
3. Curb your overdraft use
It's easy to factor in overdrafts as part of your monthly income, and they're a useful resource. But it's dangerous to max them out every month.
If you're consistently borrowing from your overdraft, look for an account with low or no overdraft fees. Alternatively, take a closer look at your finances and draw up a budget.
4. Stop relying on plastic
We're an increasingly cashless society: credit cards are just so convenient. But it can be hard to keep track of your spending; you can pay by card without fully taking in the cost. If you withdraw a set amount to spend, prices will seem a lot more real.
5. Beat your apathy
It's tempting to stay with the same providers year after year but doing so could cost you.
Remember, loyalty doesn't pay and regular switching of current accounts, for example, could save you hundreds.
Best Credit Card
|
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HSBC |
0% for 23 months(3.3% fee) | |
Barclaycard |
0% for 22 months(2.9% fee) | |
Halifax |
0% for 22 months(3.5% fee) | |
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Insure any houshold items (Fridge,Washing Machine,Oven,TV etc) through your budget account (you do have one don't you?)
Find out how much it costs to insure each item per year (easy enough via the internet) divide by twelve and and factor this monthly amount into the account. Preferably a seperate bank account.
I paid for a new washing machine (£500) out of this account.
Makes you think how much Insurance companies make out of domestic insurance. Make it yourself!
R C M Matta
Christians Against Poverty is a free debt counselling service for people in debt crisis (see website) Also CAP Money Management courses are run throughout the UK. We are the Christians! We believe that the poor, vulnerable and marginalised should be helped. Clients are all treated the same regardless of religion or no religion, colour, creed or sexual orientation. We will travel alongside clients right throughout their journey of getting out of debt if they so wish. We do not pay off clients debts, but we will negotiate with creditors, teach them how to manage on a budget, encourage saving, and aim to ensure that by good practice they can manage their money and live their lives.
Re: Stop relying on plastic.
I find the opposite is the case for me. If I use cash it can be hard to know just where your money has gone. I use cards most of the time (though always repay credit cards in full each month) and download my bank statements before going through my receipts and categorising my spending using a free money manager tool. Seeing your monthly cashflow can be a real eye opener and help you cut costs where needed.