Top Money Saving Tips

There is one sure way to get ahead financially, one that has not changed over the centuries, it is: Make sure that your outgoings are less than your income. In other words, save money whenever you can! This is perhaps a little easier said than done however since most of us struggle to find places in our budgets from which we can trim a bit of fat. Yet when we stop to think about it savings are actually rather easy to achieve. The following are a few potential ‘savings areas’ that you should perhaps consider:

Clear your credit card every month: It is a golden rule of financial planning that you should get rid of your most expensive debts first. For most people this means the money that they owe on their credit cards. If you do use a credit card it would therefore be worth your while to make sure that you pay it off every month. If this is not possible right away you could consider moving your credit card debt into a loan that attracts a lower rate of interest (e.g. a standard bank loan) and then working hard to pay it off as soon as possible.

Switch your household bills to less expensive suppliers: Many people stay with energy and telecommunications suppliers for years without really considering that cheaper alternatives might be available. This despite the facts that the market for household utilities in the UK is extremely competitive and that switching suppliers could in many cases lead to substantial savings.

Always make a shopping list: Making unnecessary purchases is one of the reasons why many household budgets flounder. Protect yourself from this by always making a shopping list (even for non-grocery shopping) and then sticking to it. This will go some way towards protecting you from ‘impulse buys’.

Make smart shopping decisions: It is often the case that huge savings can be made on the weekly grocery spend by making a few smart shopping decisions. This could include buying some of your fruit and vegetables from a market stall and switching to ‘home brand’ products where available.

Get rid of your clutter: One man’s junk is another’s treasure! You may be sitting on some things that could be quite valuable to someone else. The rise of services like Ebay means that is has never been as easy as now to cash in on this fact.

Do not automatically renew your insurance cover with your current providers: It is very convenient to simply allow insurance policies to ‘run and run’. This does not mean however that it is necessarily the best thing to do from a cost saving point of few. It would be far better to get new quotes from a variety of providers every time that a policy becomes due. This applies to all kinds of insurance including vehicle insurance, home insurance and annual travel insurance.

Think before taking out ‘value added’ products: You will often be offered ‘value added’ products like ‘Payment Protection Insurance’ and extended warranties. It could be that they will indeed ‘add value’ to your purchase/transaction under certain circumstances. It would however be a good idea to ‘crunch the numbers’ to determine whether this is indeed the case before taking it up. In far too many cases the ‘added value’ applies to the vendor and not to you!

Summary:

• The fastest way to financial stability is to make sure that your income always outstrips your outgoings.
• Clearing credit card debts can result in significant savings
• Smart shoppers always make lists and shop around
• Your financial decisions should be determined by thorough research and not merely by ‘business as usual’

Tips for saving money in a recession

All of us need to tighten our belts in a recession, but sometimes it’s difficult to make crucial spending decisions.
Here’s a list of some sensible tips for saving cash without making your life too austere:

1. Stop spending – keep your cash together and set yourself a ‘cooling off’ period before you spend on that bargain in the sales. Consider whether you really do need more shoes or that computer game.

2. Check out the comparison sites on the web for insurance, utilities and credit card rates. Make sure you are not paying over the odds and switch to a cheaper product if you can.

3. Check out your bank statement and look at all the outgoing expenses – cancel what you can. Most have us are paying a few pounds every month for a service we don’t really use, like gym membership when we could take up more running or walking.

4. Declutter – all those old clothes and unwanted gifts that are taking up space in loft, cupboards and under the bed can be cleaned up, photographed and auctioned off on websites like eBay. Or do a boot fair.

5. Look at your shopping bill. If you are mostly buying ready meals or living off takeaways, cut them out and start buying the ingredients and cooking your own meals. Maybe having your main meal at the canteen at work and a sandwich when you come home could work out cheaper.

6. If you do eat your main meal at home, then take a packed lunch to work instead of buying food.

7. Look at life’s luxuries – your mobile phone and Sky TV – do you really need a prepaid plan with all those texts and minutes? And how much TV do you actually watch to justify extra money on all those packages?

8. Cut your coat according to your cloth - put your credit cards safely in a drawer and live off your income rather than borrowing.

9. Change your brands – switch essentials like cleaning products, tissues and cooking basics to cheaper supermarket own brands rather than pay extra for a ‘brand’ name.

10. Buy a bread maker and a slow cooker in the sales. They are both relatively cheap kitchen appliances. A bread maker will soon pay for itself and keep you with a constant supply of crusty, homemade loaves while you can set a slow cooker before you go to work and come home to a piping hot meal.

11. If you have children and live within walking distance of the school, then keep the car on the drive and give you and family a breath of fresh air and some exercise.

12. If you have a spare bedroom and are struggling with the mortgage and bills, consider letting a room. Currently, you can charge a total of £4,250 a year to a lodger without paying any tax – that’s an extra £82 a week in your pocket.

If you are unlucky enough to have lost your job, taking in a lodger won’t affect any benefits you are claiming.

13. Put a little bit of money aside every week for a family treat, even if it’s something simple like renting a DVD and buying some sweets. Times might be tough but you need something to look forward to as well.

Summary

• Stop spending and review your financial circumstances by listing all your income and outgoings and considering what, if anything, you can cut.

• Declutter and be ruthless with your stuff and see what you can sell to on eBay

• Save money with cheaper brands, more home cooking and walking rather than driving where you can

• Don’t take things too far – save a few pounds a week for a treat and something to look forward to

Top tips for buying hot property in the sun

Holiday romances rarely last – and that includes any love affair you might have with a dream property in the sun.

Buying a property can be fraught with problems in the UK – let alone at long distance in a country where you may be unfamiliar with the language, legal system and financial processes.

Many holidaymakers fall in love with the sun, sea and lifestyle in another country and decide to buy a property on the spur of the moment – but if you are considering a second home abroad or even relocating, here are some top tips you should bear in mind:

• Don’t make a decision blinded by sun – enjoying your holiday is one thing, investing in a property and returning to the same place time and again is another.

Collect all the information you need to make a decision then come home, take the sunglasses off and look at your plans in the clear light of day.

Take advice from your family, friends and independent professional advisors who don’t have any interest in your purchase – and preferably advisors who are well versed with buying and selling property in the place you are looking.

• Keep it simple – never sign anything you don’t fully understand

• Keep your cheque book in your pocket until you are absolutely sure you want to proceed and that every protection of you money and interests are in place.

Just like in the UK, if you are financing the purchase with a mortgage, don’t hand over a penny until you have an offer in writing from your lender.

• If you’re buying a second home abroad and still working in the UK then arrange a mortgage in sterling to avoid losing out on exchange rate fluctuations. If you’re moving abroad and earning in a foreign currency, then try to arrange your mortgage in that currency.

• Don’t settle for second best. If you’re not absolutely sure about a property, think with your head and not your heart.

• Check out the tax implications of buying and possibly renting out your property with a tax professional in that country. Few UK accountants are qualified to advise you on overseas tax affairs.

If you are continuing to live in the UK, you need to include details of any rental income and property expenses to HM Revenue and Customs. You will pay income tax on any rental profits and capital gains tax if you make a profit selling the property as some stage in the future.

• Make sure you are completely briefed on the full cost of buying your dream property – in many countries fees and taxes are added to the purchase price that can dramatically increase the cost of the deal.

You need to make provision for all these extra costs in your budget.

• In many countries, developers structure a finance deal with banks that may include putting each plot on the development up as security. Ensure your solicitor checks this out so you do not take on the developer’s debt when you take over the property.

• Set up a bank account in the country where your property is located – pay in all the rents and pay out all the bills.

Summary

• Don’t make any instant decisions
• Don’t sign any papers you don’t understand
• Make sure you have your finances sorted out before proceeding with a deal
• Get a team of independent experts to give you advice
• Don’t forget to find out all the cost and tax implications before you proceed

Equity release for cash-strapped pensioners

Many pensioners are forced to live off limited pensions and savings despite owning mortgage-free homes worth well in excess of £100,000.

They are victims of the classic asset rich/cash poor financial trap as they cannot raise a conventional loan or mortgage because they are too old or have no income, but have valuable bricks-and-mortar security to offer a lender.

Traditionally, mortgage lenders will let people aged up to 75-years-old borrow, providing they have an income to repay the loan.

As medicine and science increases longevity and people are living well in to their nineties, more and more pensioners are forced to live on dwindling savings and a small pension.

One way of solving the problem is an equity release plan – also called a lifetime mortgage, a reversionary mortgage or home income plan.

These financial schemes allow the elderly to cash in some of the value of their home with the debt settled from the sale of their after death.

However a provider dresses up their equity release plan, the engine under the bonnet is pretty much the same – you borrow part of your home’s value and in return you give the lender a share of the sale proceeds when you die.

To qualify, you will generally be at least 60 years old, have no mortgage and own a well-maintained property.
If you are considering borrowing from an equity release plan, Age Concern and the Financial Services Authority recommend taking independent financial advice before proceeding.

Some points you should think about before making a decision are:

• You make no loan repayments – the lender makes their cash back when your home is sold
• The percentage of the property you own is set at the start of the plan
• If the property goes up or down in value, so does your share pro rata
• More cash may be available unless you took the maximum offer from the start
• If you smoke or are ill, you may get more cash than someone who doesn’t smoke and is fitter because the lender may consider they will receive a return on their investment quicker because you may die earlier.
• The property valuation your loan offer is based on will be less than the current market value of your home

To make sure you are dealing with a reputable equity release plan company, check their products carry the SHIP logo (Safe Home Income Plans).

SHIP is a financial industry group promoting safe equity release schemes. You can contact SHIP on 0870 241 60 60 or visit their web site at http://www.ship-ltd.org/

Members provide a number of customer guarantees in their plans, including:

• You have the right to live in your property for life
• You may move home without penalty
• You will never owe more than the value of your home

Summary

• Anyone over 60 struggling on a small pension or limited savings can consider taking out a mortgage or an equity release plan

• Mortgages are difficult to obtain for the over 60s who may not have sufficient income to support the borrowing

• Equity release plans are designed to release cash from the value of a home for the over 60s

• If you are considering a equity release plan, make sure the scheme is SHIP approved

Giving yourself credit where credit’s due

Banks, building societies and other lenders swap information about your financial details to make sure you are someone who pays their bills on time so they are not risking losing their cash if they lend to you.

All this information is collected in three main databases in the UK and lenders typically ask for one or more of your credit reports from these suppliers when you apply for credit or a loan.

Before deciding whether to lend to you, the lender will consider your credit report, application form and other information that might consider relevant, like you income, and give you a credit score.

Your credit score varies from lender to lender as they all have their own methods of calculating how much of a risk you are as a borrower.

If you are looking at borrowing a substantial amount, like for a mortgage, then it makes sense to review your credit report to make sure no inaccuracies have crept in that may lower your score and perhaps cause the lender to refuse your application.

Obtaining your credit report

The three main companies that collect your financial data are:

Callcredit

• http://www.callcreditcheck.com/

Equifax

• http://www.equifax.co.uk/Products/credit/credit-report.html

Experian

• http://www.experian.co.uk/

You can apply to each company for your credit report. Costs vary depending whether you want an online version or a printed copy sent to your home, but are usually around £2 or a bit more. Check out the pricing at each site before application.

Cleaning up your credit profile

Different lenders add or subtract points from your final credit score. Some of the main point winners and losers are:

• The Electoral Roll
  If your name is not listed at your home address, contact your local council and ask them to add you. Lenders confirm your address and the time you have lived there from the electoral roll.

  The council will send your details to all three credit agencies within 28 days so they can update your record.

• Check for mistakes
  If you’ve paid a bill but your credit report shows you still owe the money, contact the lender and ask them to put their records straight. The lender should pass any corrections on to the credit agencies for you.

• Court judgments and decrees
  If you have paid a county court judgment (England and Wales) or a decree (Scotland) against you for failing to settle a debt, make sure your credit report confirms you have paid in full.

To correct an error, contact the court that made the judgment with your case reference and ask for the court record to reflect your settlement. If the court agrees, the amended record is forwarded to credit agencies with 14 days.

Follow the same procedure if you believe a CCJ or decree is wrongly registered against you.

• Bankruptcy or sequestrations
  If a bankruptcy order or sequestration is annulled or discharged and is not shown on your credit report, send a copy of certificate to each credit agency for updating your record.

• Duplicate credit searches
  If a lender has searched your details more than once for the same one credit application, ask them to delete the additional searches.

  When you apply for credit, your credit record is searched and recorded. If a lot of searches in a short time, this can reduce your chances of borrowing.

Searches stay on your record for 12 months from the date of the search.

• Inaccurate linked addresses

If you have been linked to addresses or other people incorrectly, you can ask the company who made the link to delete the information.

Your address details are collected whenever you open an account – for instance with a mail order company or catalogue.

If other people who live in your home are recorded on your report, you can ask for these to be removed as long as you do not share any joint accounts or tenancy of the property with that person.

• Notice of correction

If you feel you want to explain an entry on your credit report in more detail, you can write to the credit agencies and ask them to put a notice of correction against an entry.

Summary

• Three main credit agencies collate data from all the UK’s banks, building societies and credit companies so anyone you ask for credit can see an overall picture of your financial circumstances.
• You can apply for a copy of your credit report from each of these agencies
• If you think the report contains errors, you can ask the credit company or court to amend their records.
• You can also post a notice of correction on your credit report if you feel an entry on the credit report does not correctly reflect your circumstances.

Six Simple Ways to Ease the Credit Crunch

Like it or not, the country – and indeed, most of the world – is in the icy grip of the credit crunch. However, there are ways to help make these financial straits a little easier to bear. Here are six tips to help you weather the current monetary storm:

1. Set a budget (and stick to it).
This is really the golden rule of personal finance. Make sure you know exactly how much you have, exactly how much you need, and exactly how much you have left over at the end of the month. If you do this, and make sure you always have a little bit extra tucked away in case of an unforeseen emergency – a boiler breakdown in the middle of January, or your car’s engine finally giving up the ghost and needing a trip to the garage – the credit crunch won’t cause you too many problems. Aim for three months’ typical expenditure (six months’ worth, if you’re self-employed), and you’ll find a lot of worries disappear from your shoulders.

2. Pay off your debts.
Just because money’s tight, it doesn’t mean that you can afford to forget about your debts. The more you can pay off and still live comfortably, the better you’ll be in the long run, as you’ll end up paying back less interest. Try and put as much as possible towards your repayments, and avoid only paying back the monthly minimum if you can at all avoid it.

3. Try second-hand.
If you absolutely have to make a big purchase – furniture, for example, or white goods and electrical products – you might want to consider trying second-hand shops and other non-new retail outlets. It’s possible to pick up some real bargains… and besides, does it really matter if your washing machine isn’t fresh out of the showroom?

4. Don’t be afraid to haggle.
If you’re making a big purchase and second-hand doesn’t really work for you, don’t be afraid to haggle. Most major retail outlets (especially for larger items) have some degree of flexibility with prices, and may be able to make you an offer. While it might not amount to much, you don’t get anything if you don’t ask. What have you got to lose?

5. Use your loyalty points.
The vast majority of people have loyalty cards tucked away in their purse or wallet, slowly accumulating points that can be redeemed for store credit, special offers, or reduced prices on getaways or other out-of-store treats. Now’s the time to cash them in, and get back some of the (often surprisingly large amount) of money that you’ve got saved up on your plastic. After all, it’s not gaining interest, and it’s tied up in a very specific place. If you’re going to be making a purchase at a shop you’re in a points-scheme with already, it should help to keep a few more pennies about your person – and every little helps.

6. Keep looking.
Even if you think you’re pretty well bunkered-in as far riding out the credit crunch goes, there are always savings to be made – especially in uncertain times like these, where the financial playing field can shift rapidly. If you pride yourself on being financially savvy, it doesn’t hurt to keep a lookout for new offers and deals coming up that could save you considerable amounts of money.

Online Current Accounts Explained

Given that we now live in a digital age in which a large number of people have access to the internet twenty-four hours a day, seven days a week, it should come as little surprise that online current accounts are rapidly increasing in popularity.

While some people decry the fact that it’s taking the human contact out of banking and it’s a step away from the old fashioned face-to-face values, that kind of nostalgia really has no place in today’s banking marketplace. When was the last time you had a pleasant chat with your bank manager? The odds are, it’s been a while. Using the latest technological advances allows you to streamline your financial transactions to suit the world you live in – no rushing to the bank before closing time, no being unable to access your funds during the night or on Sundays, and no dealing with irritable or poorly-trained bank tellers (a minority, but they’re certainly still out there). Online banking allows your money to work for you, not the other way around.

Setting up an online current account is, generally speaking, very simple. It usually involves going to the site of the banking institution in question, answering various questions about what you need from your account and personal details. Once that’s finished, it’s as easy as choosing a password and printing off a form to sign and send in – thanks to the fact that digital contracting is still in its infancy, you still need to have an actual pen-and-ink signature to make the whole thing official.

It all depends on what kind of service you’re after, of course, but it’s not at all unusual to find banks and other financial institutions that offer better deals for people who use internet banking services, including online current accounts. This usually comes in the form of higher interest rates on your savings, but banks are free to offer the same kind of incentive they do with any other kind of account, be it telephone or in-branch banking. Check to see what the terms are before you sign up, and make sure you’re getting a good deal.

Of course, one of the main advantages of an account like this is its functionality. Once you have the ability to move your money around at the click of a mouse, it’s easy to find the best deal possible, as well as to keep track of your income and expenditure over any given period. Additionally, up-to-the-minute electronic statements means that, should anyone be making unauthorised withdrawals from your account (as a result of, for example, identity theft), you can find out right away. For the computer literate, there’s really very little to lose by embracing the future of banking.

That doesn’t mean you shouldn’t still hunt around and make sure you’re getting the best deal, but for those in the know (and for those willing to learn), online current accounts can be an extremely simple way of saving both time and money – and in these financially-shaky times, who couldn’t use a little extra of both?

Switching gas suppliers

It can be difficult knowing when to switch gas suppliers – are prices going up, are they about to fall, or are we in a period of relative stability? The answer could influence whether now is a good moment to switch. For those who have never switched gas suppliers, however, it is widely accepted that a change could result in significant savings on their gas bills.

Dealing with the easier group of consumers first, it is generally reckoned that those who have never switched suppliers before could be saving 20% on their gas bills. The reason for this is a combination of the consumer’s inertia – staying with the same supplier at the same tariff, whatever is happening to prices in the wider, competitive market – and the supplier’s reliance on that very same consumer inertia to maximize the returns on the sale of energy. Consumers who have never switched will be long-term customers of British Gas (or Scottish Gas north of the border) and stand to gain a significant reduction, therefore, simply by switching suppliers at any time.

For those consumers who have taken a keenly healthy interest in what they are paying for their energy bills, however, it is more difficult deciding whether now is the right moment to switch. Whether prices are about to rise, or even if they are about to fall, all suppliers are likely to follow suit and adjust their prices accordingly, but there is no way of knowing whether each company will maintain its relative price differential in the market after the price adjustment. You could end up paying relatively more with a new supplier, compared with the one from which you had recently switched.

Switching gas suppliers, therefore, is more safely and certainly done when prices have reached an assumed degree of stability and all of the companies are therefore playing on the same level playing field.

If you have decided that switching gas suppliers could lead to savings on your monthly expenditure, the following might be some of the points you want to take into account when comparing prices and choosing a tariff:

Whichever supplier you choose, remember that payment of the monthly account by direct debit is nearly always going to be cheaper (up to 10% in some cases). This way, the supplier knows that they will always be paid and, in the event that they have not been able to take a meter reading, will send an estimate which invariably results in your overpaying for that month.

Switching suppliers could give you the opportunity to choose a so-called “capped” tariff which effectively fixes the price for which you will be paying for your gas over the following two to three years. Although you will be paying slightly more for the certainty of a fixed price, at least it can help you to budget for a known amount and you are freed from any worry about price rises that you cannot afford. If the supplier’s prices are reduced, however, you will lose out.

For the past year or so, the energy regulator, Ofgem, has allowed gas suppliers to require their customers to sign up for a yearly contract of supply, thus preventing ay switch to a competitor supply during the term of the contract. Not all of the suppliers demand such a contract, so if you value the freedom of switching gas suppliers whenever you choose, you might want to avoid those who will “lock you in”.

Finding the best Digital TV Package for you

Finding the best digital TV package for you and your family of course depends on just what you want from your digital television service. It might be the basic ability to watch the relatively limited range of familiar channels broadcast by what is known as “terrestrial television” or it could be the choice for a whole range of different television and radio channels, High Definition television (HDTV), information services, telephone services and internet broadband services. These are all components of some of the digital TV packages that are currently being rolled out across the country.

Whether you choose a basic package or one with all the whistles and bells, however, one thing is certain: you will need either a digital television (with the digital tuner already built into it) or a set-top box, “digibox” or STB, to covert an older-style analogue television. This is because the existing analogue signals are being progressively switched off as the country’s regions switch over to digital broadcasts. The switchover is scheduled for completion during 2012.

In addition to the television content you want, finding the best digital TV package for you will also depend on the digital service providers in your area. There are essentially four main types of service provision and each will determine, to one degree or another, the range of content choice your package will be able to offer:

Free-to-air

Also known as “terrestrial television” this is the core service that will continue to offer such familiar channels as the BBC’s (1, 2, 3 and 4), ITV’s (1, 2 and 3), Channel 4, Five, S4C and E4. There is no monthly subscription required to view these channels, but simply the digital television’s in-built tuner or a set-top box. Current service providers are Freeview, BT Vision and Freesat.

Digital satellite

Digital television is also broadcast by satellite and reception of these services requires the installation of a mini satellite-dish to receive the signal and set-top box, together with the provider’s viewing card, to decode it. Sky is currently the principal provider of satellite services and will offer a complete installation package with all the necessary equipment for receiving and decoding the broadcasts.

Digital cable

Just as the name suggests, this relies on the use of a cable network, along which providers can pass not only digital television signals, but also telephone and broadband internet services. Clearly, you would need to live in an area where one or other of the cable providers has installed a cable network to subscribe to these services. Currently some 15 million homes in Britain have access to digital cable television (and related services).

Digital broadband internet

The fourth means of delivering digital television is via a high-speed broadband network using telephone lines. Connection requires a telephone line, set-top box and modem. Although this system naturally enables a home connection to the internet, digital broadband internet television is not the same as watching television on a home computer via the internet. Instead, it lets you watch television programmes as and when you watch them, rather than waiting for them to be broadcast. Therefore, you can stop, pause, rewind or fast-forward the programmes.

Summary

Finding the best digital TV package for you, therefore, is a question not only of content, but the choice of delivery system and the availability of your chosen system of delivery in your area.

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