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FOOL'S EYE VIEW
The sun is shining, the birds are singing and you've been staring enviously at that empty desk beside you since your colleague left for his vacation. Yes, you need a holiday. The only trouble is you don't have the cash to pay for it. So what can you do? After all, you can't magic money out of thin air! Maybe not, but if you can take control of your finances there are a number of ways you can save money – and if you're motivated and patient you could easily find yourself with enough cash to pay for that break! So where do we start? Well firstly, you need to assess your financial situation. If you haven't already set aside between three and twelve month's income into your rainy day fund and regularly contribute to some form of retirement fund, you need to consider setting these up – these tips may help. However, if you have already got these funds in place, but are still struggling to afford a holiday, the following advice should help you free up a surprising amount of cash! 1. Kill Your Debts Your first priority on the road to freeing up money is to kill off those loans and expensive credit card balances. Remember, you're paying interest every single day on that money – which can completely negate any savings you can make elsewhere. And those monthly payments will be all yours once the loans are paid off! You can find personal loans from 5.9%, so why not use our tips to find a cheaper loan – but make sure it's flexible. As for credit card debt – if you move your balance to a 0% balance transfer card you could avoid paying any interest for up to nine months. This doesn't mean you can relax though – move the debt, cut up the card and pay off as much as you can each month. Aim to have the whole debt paid off before the interest free period ends. Just look at all the interest you could save: Loan Credit Card (assuming the minimum payment of 3% is made each month) Which gives a total saving = £220 * Note that although we've compared deals over one year, there are currently no 12 month, 0% credit card balance transfer deals on the market. The solution is therefore to take out a nine month, 0% card, and transfer it to another before the 0% deal expires. Or, pay it off in 9 months instead! Find Personal Loans from 5.9%, and 0% Balance Transfer Credit Cards 2. Save Money On Your Mortgage Mortgages are usually our biggest debts – but this means we can potentially make some huge savings. Unfortunately, many of us don't bother to re-mortgage and simply pay our lender's Standard Variable Rate (SVR) - around 6.75%. Why? If you were to switch your £100,000, 25 year, fixed-rate mortgage from your lender's SVR of 6.75% (paying £691 each month) to a Best Buy deal of 4.55% (paying £558 each month), you could potentially save £1,596 over the course of a year on payments. And switching to an offset or current account mortgage could save you even more (but don't forget to find out about any redemption penalties). Although this is impressive, if you were to take a longer term view there are even more potential savings to be made on the loan as a whole. By switching mortgage to the cheaper, flexible deal but keeping your payments the same (which equates to overpaying by around £133 each month) you could save a whopping £22,397 in interest and pay the loan off in just 17.5 years, rather than 25! Find a cheaper mortgage in our Mortgage Centre. 3. Get Cheaper Cover How many insurance policies do you have? Household, motor, travel, life, critical illness, income protection – they go on and on? All in all they can easily add up to a lot of money – especially as many of us are paying too much for our cover. However, by re-brokering through a discount broker to a better deal we can potentially save pounds on our life and critical illness insurance, for example. And shopping around for that motor or household policy when its renewal date comes up could save you a small fortune. Learn about the Rule of Three and make sure you're getting the cover you need. Don't forget to check out the Best Buy travel insurance policies – useful for the future when you book that break! And if you're paying for expensive mortgage payment protection insurance or payment protection insurance it may be worth shopping around for cheaper cover. You may even find it cost effective to cancel the premiums and save this money separately into a high paying savings account (known as self-insuring). If you can save just £50 each year on each of the six above policies by re-brokering (and chances are you could save much more!) you could free up another £300 to go into the kitty! And switching energy supplier could save you around another £170 per year. Find cheaper cover through our discount broker 'The Idol' in our Insurance Centre. 4. Rent A Room If you have a spare room, why not use it? By taking in a lodger through the Rent a Room scheme, you could earn £4,250 before needing to pay any tax! 5. Other Money-Saving Tips Where do we start? You can save money on just about everything! Giving up smoking 20 cigarettes a day at £4.80 a pack would save you £1,752. Two takeaways a week at £20 each eats up a surprising amount of money each year. Halving this would save you another £1,040 each year. And need I get started on the savings to be had by making lunch during the week, rather than buying it? 6. Bank Accounts Once all of these money saving plans are in place you'll need somewhere to stash that cash, and for that a top paying savings account should fit the bill. There are a number of excellent internet savings accounts paying over 5% AER. If you've found saving to be difficult in the past, why not consider an account that pays interest monthly? You'll find seeing your money grow every four or five weeks to be a powerful motivator! You can apply for a number of Best Buy savings accounts paying 5%+ through our Savings Centre. And switching your current account to one of the Best Buys can earn interest on that money too. Alliance & Leicester's market leading current account is a regular feature at the top of the Moneyfacts Best Buy tables, paying 5% AER with a 12 month, 0% overdraft too. And they'll give you £25, just for opening your account online! Find a better current account, including Alliance & Leicester's Premier Plus account in our Banking Centre. If you were to follow all of these tips, you could save an unbelievable £9,329 over the course of a year. And don't forget, there would be interest on top of that! Of course, the chances are you couldn't follow all of this advice, but if you could save just a quarter of that sum you'd still have over £2,300 – enough to pay for a holiday (or a good chunk of one) I'm sure you'd agree! So don't fret if you're longing for a break - put some of these tips into action and start squirreling for that holiday, today. > Compare: 0% Credit Cards | Loans | Mortgages | Savings | Insurance