FOOL'S EYE VIEW
Great Monthly Savings

By Jane Mack (TMFJane)
October 7, 2003

The other day I had reason to phone my mortgage lender. The first payment for our new home improvement loan had just left our bank account and it was for a tad more than I'd been expecting. It was my fault because I'd forgotten to tell them to take it out of the overpayments we've been making on our mortgage rather than adding it on as extra money.

While I was on the phone to them, I asked if I could get a better deal on the home improvement loan. You might think that's a bit odd considering I've only just taken it out but it had to be in place and operational before I could switch it. I was told that, yes, I could get a better deal but it wouldn't save me much so it was hardly worth bothering with.

How much? I said. Only £10 a month, she said. But that's £120 a year and nearly £1,000 over the remaining term of the mortgage if I don't pay it off earlier, I said. So I asked her to change it.

It's a trap people often fall into. Why bother making the effort to get a better deal if you're only going to save £10 here or £15 there? My builders were a bit perplexed the other day when I made them cancel their order for the five tons of shingle they'd just ordered for me. I wanted them to order it from another company who were £9 cheaper. (I'm sure they thought I was mad – not to mention a cheapskate!)

The other day I also took back the surplus bathroom tiles we'd bought and the tin of paint we'd bought, which turned out to be the wrong colour. In the past, we'd have just dumped that sort of thing in the shed on the assumption that it wasn't worth the effort of taking them back. That got me a refund of £12.98.

I've also recently taken over doing the weekly shop. About five years ago, my husband started doing it and I've been watching with increasing alarm at the bigger and bigger receipts he's been coming back with. Now that supermarkets are selling books and CDs, it's proved too tempting for him not to stick the latest release in the trolley along with the spuds. In the past month since I took over, I reckon our grocery bill is down by at least 30%.

The fact is, if you look after the pennies, the pounds end up looking after themselves and it's why it pays to give your finances a thorough overhaul every now and then.

Make sure you're getting the best rate possible for your mortgage. According to the Council of Mortgage Lenders, about 40% of homeowners are on a variable rate. While some of these will be discounted, there are still many who are on the more expensive standard variable rate because it hasn't occurred to them to look for a better deal.

Switching your credit card debts to a card with a 0% interest rate will also save you money. As long as your credit rating is relatively good, you're unlikely to have a problem with your application.

And then there are all the bills for your utilities. It's easy to switch utility companies these days and even if you're only saving a few pounds here and there, it will all add up in the end.

Having just totted up what I've saved us in the last month I reckon it comes to just over £150. I'm a bit surprised it's that much but, yes, it's definitely just over £150. Looking after the pennies is worth the effort.

Where next? Make a start on saving money by getting a better deal on your Mortgage and Credit Card.