How to cut back without losing out
We all need to be careful with money at the moment – but we’re used to enjoying a high standard of living and regular indulgences. From the big things, such as a wedding or holiday, to everyday necessities, like electricity and food, these tips could help you find ways of cutting back without losing out.
Know what you really want
Almost certainly, there are things you don’t mind skimping on and others that you can’t imagine living without. Make lists of both these things and see if items on the first list can subsidise the must-haves on the second. For example, making your own packed lunch and drinking tap water and machine coffee instead of buying a sandwich, a bottle of mineral water and a latte every day could save you enough for a night out every week.
Pay less for utilities
We can’t do without electricity and gas and it’s unthinkable to live without a phone, so gather these regular bills together and tot up what you’re paying before hitting the price comparison sites. You could save hundreds. Turn off lights and appliances when you’re not using them, don’t leave the tap running when cleaning your teeth or washing up and take advantage of any free calls that are part of your phone package and you’ll see further reductions.
Analyse your borrowing
It’s a rare person who doesn’t have a single credit or store card, loan or mortgage. Some of us don’t have a clue what these cost us in interest and repayments every month – you may even have credit accounts you’ve completely forgotten. To get a snapshot of your borrowing and how well you’re managing it, take a look at your Experian credit report – it’s free with a 30-day trial of CreditExpert. It lists your credit accounts and repayment history, acting as a timely reminder of what you owe and helping you to see which accounts are costing you the most.
Smarten up your credit history
A good credit history gives you a better shot at the deals you really want, so check your credit report carefully. Ask for any clerical errors to be amended, close unused accounts and ask the credit reference agencies to add a note of explanation if special circumstances such as an accident, explain why you’ve had problems making repayments in the past. Even registering to vote can add vital points to your credit rating, so do it now.
Try new brands
Some supermarkets are cheaper than others but they may not be a practical option for you. If that’s the case, try budget or value ranges that often taste just as good as the big brands you usually buy – you could save pounds. Another worthwhile tactic is waiting until just before closing time to do your shopping, so you can pick up your normal basketful at a cut rate. Chat up local shopkeepers, too – they’ll have ideas for delicious meals using less expensive ingredients.
Get help from the government
It’s worth checking if you qualify for any government-funded schemes that will help with your day-to-day expenses. For example, you could get help with insulating your home and save an average £270 on your heating bills, according to the Energy Saving Trust. The latest idea is to subsidise new replacements of cars that are at least ten years old in order to reduce pollution and energy use. Go to www.direct.gov.uk if you’d like to know more.
Bag the best deals
Even in the depths of the credit crunch, there are some brilliant deals out there. Furniture and electrical retailers still offer interest-free credit and credit card companies have zero per cent balance transfer and spending packages that could ease the financial strain for a few months. Do your research first and identify a deal that matches your circumstances – you’ll stand a far better chance of getting a “Yes”. Always check your credit report before you make an application, to ensure that there’s nothing in it that could spoil your chances and put right any errors before you apply.
Go bargain-hunting
Recent research by CreditExpert found that almost half of Britons are putting major plans on hold this year because they simply can’t afford the expense of events such as getting married. That means there’s excess capacity – and you can grab a bargain. Builders need work and will negotiate prices for extensions and loft conversions, cruise lines have cabins to fill and plastic surgeons aren’t exactly overwhelmed by potential patients. Wedding specialists, venues and caterers all want your business and as for cars, 50 per cent of respondents in the CreditExpert survey said they wouldn’t be upgrading – which means price cuts so extreme that it can be cheaper to buy new than second-hand.
Don’t use a scattergun
If you want to use credit to fund a major purchase, take your time to target the right deal. Don’t fire off multiple applications in the hope that one of them will be accepted because each one could trigger a search of your credit report that will leave a record, known as a footprint. If other lenders see a lot of these, they may think you’re over-stretched, getting desperate or even suspect a fraud, which will depress your credit rating and reduce your chances.
Be realistic
Don’t torment yourself by eying up stuff you know you can’t afford. Instead, buy the best that’s available within your budget or be patient and save until you can make your dream come true. You’ll get much more pleasure in the long run – and you’ll sleep easier too.
- See your Experian credit report free with a 30-day trial of CreditExpert from Experian click here
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