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FOOL'S EYE VIEW
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One of my favourite financial books is The Money Diet by Martin Lewis, a well-known financial journalist, consumer champion and all-round good egg. Martin claims that his money tips and tricks could save a typical family up to £6,000 a year! Anyway, I can't write an entire book today, so I thought I'd set my sights a little lower by giving you ten tips that could save you almost £4,000 a year. Here we go: Tip One: Murder your mortgage rate Seven out of ten homes in the UK are owner-occupied and, between us, we homeowners have a combined mortgage debt of £818 billion. With 11.5 million home loans, that comes to an average of over £70,000 per mortgage. However, most mortgage borrowers pay far too much interest. If your home loan isn't on a special-rate deal, you're probably paying well over the odds, because most major lenders charge a standard variable rate of 6.5%. With a little homework, you can easily slash 2% off this rate, which comes to £1,400 a year on a £70,000 interest-only loan. We're already a third of the way to our £4,000 target! Tip Two: Don't renew your insurance Don't get me wrong - I'm not suggesting that you cancel all your insurance policies and pocket the premiums! Instead, use all renewal notices as reminders to shop around for better deals. Try getting quotes from a few websites, direct insurers and brokers - I reckon you should reduce the cost of your life, health, home, motor, travel and pet polices by £700 a year. Tip Three: Get rid of expensive debts Why pay interest at rates of up to 30% on your credit and store cards? Simply transfer your balances to one of the seventy or so credit cards that don't charge interest for an introductory period. This could give you a breather of up to a year, in which time you could save £500 or more on a balance of £3,000. Tip Four: Pay less to use your car This article shows you how to drive down the cost of buying, running and servicing your car. Also, using the free AA Petrolbusters service could cut up to 5p from the cost of every litre of fuel you buy. Your total saving could easily be £300 a year or more. Tip Five: Fight your phone bills BT customers can switch to another tariff or provider without any fiddling or re-wiring, as this article explains. You can also pay less for calls by switching mobile tariffs and Internet Service Provider (whether you're a broadband or dial-up user). I estimate the total saving at around £250 a year. Tip Six: Don't pay high-street prices for goods Using online 'shopbots' - price-comparison websites - means never again having to pay full price for books (including The Money Diet!), CDs, computer equipment and games, DVDs, electrical and electronic goods, etc. Alternatively, borrowing books, music and films from your local library works out even cheaper! Estimated saving: £250 a year.
Tip Seven: Get discounts for paying by Direct Debit Bank payment group BACS estimates that consumers could save up to £200 a year by paying their bills by Direct Debit (DD). Fuel, telephone and satellite TV suppliers offer discounts of up to 15% to DD customers. Tip Eight: Flatten your fuel bills According to uSwitch, almost 16 million UK households - almost two out of three - have failed to switch energy suppliers. That's a crying shame, because prices are absolutely soaring this year. At an average annual saving of £140 per household, we're paying £2.2 billion a year too much for gas and electricity! Learn more here. Tip Nine: Blow out your bank Most UK adults have a bog-standard, old-fashioned bank account that pays 0.1% interest on credit balances, yet charges eye-watering rates of interest, arrangement fees and fines on overdrafts. But it doesn't have to be this way! Thanks to a tougher Banking Code, it's now much more straightforward to switch to another bank. Doing this could mean earning up to 55 times as much credit interest and paying vastly reduced borrowing charges. That's easily another £100 a year in your pocket. Tip Ten: Ditch your dodgy deposit accounts Thanks to rising interest rates and increased market competition, savings rates have improved steadily over the last year. However, there are millions of inferior accounts out there: one estimate is that savers are losing out on £5 billion by sticking with these stinkers! If your no-notice account isn't paying close to 5%, it's time to ditch it, because the best online accounts are paying up to 5.5%. Increasing your savings rate by 2.5% could make you an extra £100 a year (after 20% tax) on a £5,000 nest egg. What's more, shifting your money into a tax-free cash mini-ISA means that you won't lose a fifth of your interest to the taxman (two-fifths for higher-rate taxpayers)!