This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
FOOL'S EYE VIEW
By
Many of us have already started 2006 with the best of intentions: eating healthily, doing more exercise and giving up smoking where applicable. So why don't we do the same for our finances? By spending a little time going through these four points you can start to get your money matters in good shape for the year -- which, all going well, will mean things can tick along nicely until this time next year! So, fancy starting your financial detox? Here goes! 1. Sort out your mortgage What is the term remaining on your mortgage? And what is the rate you're currently paying? How long do you have until you can re-mortgage? And which type of mortgage should you go for; interest only, repayment, offset, fixed, variable? If you can answer all of these questions straight away, you're probably pretty well organised where your mortgage is concerned. However, if like many of us you're a little shaky on one or two details, now's a great time to refresh your memory by taking a look at that mortgage documentation. Initial mortgage deal expiry dates can come around surprisingly quickly, so you need to be on the ball and ready to re-mortgage if you want to avoid paying over the odds. Re-mortgage Consider this: every month after your initial deal lapses by is a month in which you must pay your lender's Standard Variable Rate. For a 25-year, £100,000 loan at 4.5%APR, your monthly payment would increase by over £119. That's an extra £1,433 each year! If you'd rather any extra money paid went towards reducing your mortgage, rather than paying off more interest, investigate your options around two months before your deal expires. Start by calling your lender and finding out what it has to offer -- obviously staying put will reduce the fees payable. Unfortunately, many lenders these days seem more interested in attracting new customers, rather than keeping existing ones happy. But worry not; there are plenty of good deals out there if the rate you're offered isn't up to scratch. Brokers Checking the money pages of national newspapers will give you a good idea of the best rates available. You can either call lenders directly to find out what you would be offered, or you can use a broker. The advantage of the latter is that you provide one person with your details, and he or she will check for the best deals applicable for you. Brokers can also sometimes obtain deals that you'd find it hard to get yourself. If you are interested in using a broker, make sure you pick one that is "whole of market" or you'll find he/she can only recommend products they are tied to. Watch out for fees too -- brokers such as London & Country offer a whole of market, fee-free service. Overpayments If your mortgage term isn't up for a while, this doesn't mean you should relax. This is the biggest debt that most of us have and even though mortgage rates are usually quite low, it's still accruing a lot of interest daily. If you'd like to trim down your mortgage quickly, consider overpaying. Most mortgages allow us to pay an extra ten per cent each year without penalty (check the details of your loan) and even an extra £50 each month can shave thousands off the total amount payable, and years off your term. Find out more in our Mortgage Centre. 2. Bump up your pension Ah... the subject many of us choose to ignore! But we'll all be old one day, fingers crossed. Which pensioner would you prefer to be -- the one taking regular holidays and not worrying about anything, or the one living on economy baked beans, fearful of how to pay the next bill? Now is a great time to bump up that retirement fund contribution, so stop procrastinating and do something! Very few of us contribute enough to these funds (take a look at your projected pension statement if you need proof -- could you live on that?) but few of us hold much hope that the State pension will turn out to be a knight in shining armour when we come to retire. Take a close look at your pension and if your projected income is too meagre, see if you can increase your contribution by at least one per cent -- if you've just had a bonus this should make it less painful. It will all count in the future! If you can afford to contribute more, remember that as of 5 April, so-called 'A' day, we will all be allowed to contribute our whole salary into our pensions (up to a maximum of £215,000 per year) if we can afford it! And if you're not a pensions fan, make sure you're stashing some money away for the future somewhere -- a Maxi share ISA can be a great alternative. 3. Pay less for cover This is an area where many of us pay far too much -- insurance. It's far too easy to use the forms for automatic renewal if we don't take the trouble to phone up and cancel them. But phoning around for more competitive quotes each year is a sure-fire way to save some serious cash. So don't simply accept your insurers' renewal premium. Simply phoning a few providers, for example, can drastically reduce motor insurance premiums, and save you an absolute fortune. The same goes for buildings and contents cover. And if you took out a life insurance policy more than five years ago, or you've given up smoking for over a year you may be pleasantly surprised should you try to re-broke your policy. This type of insurance has become far cheaper in recent years, and being registered as a non-smoker can slash hundreds off a premium. So get to work at tackling those insurance premiums as soon as those renewal notices come through and save yourself some serious money. Get cheaper quotes in our Insurance Centre. 4. Hack back those energy bills Sometimes I do find it shocking when I realise how much my energy bills amount to each month. And with rumours of more increases in the near future, it's a depressing subject. However, many people who have never switched supplier should still be able to save money by making the move. Companies such as uSwitch believe that up to £170 a year can be saved, which is not to be sniffed at! Check out how much you could save by using one of the many price comparison companies and find a cheaper supplier. However, if you're interested in a capped, or fixed rate tariff be warned, a recent report from Datamonitor has revealed that to sign up to such deals means paying a premium. However, recent energy price surges of between 10 and 15% may have made prices unnaturally high, meaning that signing up now could leave you paying more, for longer -- especially with companies such as British Gas allowing customers to fix their prices until 2010. Datamonitor has pointed out that value does not depend on today's prices, but where the market moves during the course of the fix -- which could be up, or down. Make sure you check all of your options carefully when choosing an alternative tariff to switch to. So there you have it, how to start your financial detox. What are you waiting for? Let the Fool help you: And if your finances are still full of toxins after that lot, try Detox Part II!