A nation of SaversHow to save extra cash

By: Luke Ashworth

The UK is seeing a record number of people with debt problems and this is in supposedly good economic times. What no one really knows is what will happen when obtaining credit becomes far more difficult.

The impending credit crunch threatens to arrive just as the nation has become accustomed to relying on credit to obtain their lifetime needs such as homes, cars etc.

The Bank of England (BoE) doesn't want to bring things to a crashing halt, however, the ?Government has made it harder to assess the true state of the housing market by encouraging an artificial spike in activity before the introduction of the Home Information Packs.

British credit card holders now owe an average of ?2,200 on their plastic and with retailers reporting a slump in sales not seen for two decades, it is clear that shoppers are reining in their spending. Not only that, we are turning to our savings rather than our credit cards.

But because we have become so reliant on our plastic cards, it may be hard for some us to know not just how to put money aside, but how to actually save money in our everyday lives.

The important and probably the biggest savings you can make is through your mortgage.

The most expensive item you are ever likely to buy is your home. If you're not in the privileged position to pay cash, make sure the loan you use to finance it is the best available. For example, if you are paying your lender's full standard variable rate (SVR) you are probably paying hundreds of pounds a year more than you need to.

There are thousands of deals to choose from and while it is vital to check the small print for hidden catches, this is a relatively easy way to save a lot of money.

Before throwing all your money at your savings account one of the golden rules of financial planning is to clear your most expensive?debts first such as credit cards.

While your favourite piece of plastic may be a way to for goods and services, if you can't clear the balance every month, consider a low-cost loan as an alternative.

Credit card APR’s tend to very expensive and even if you are not spending on your credit card, still having debt on it to pay off will cost you in ‘interest on purchases’ every month. ?

Another way to save money is to realise where you can cut your costs. To do that, it is a good idea to monitor how much you are spending on every day utilities and necessities such as water, gas and petrol.

Cars are often used for their sheer convenience but consider walking to the shop to get your milk or taking a tube every so often to cut parking and congestion charge costs. Doing this just once a week could save you around ?80 per month.

To monitor other costs you could also consider installing a water meter and using the prepay system for your gas and electricity. That way you can set yourself a spending limit on these utilities each month which would also force you to keep an eye on your consumption.?

To cut your phone bills look into cheaper alternatives such as voice over the internet, Skype or prepaid mobile phones. If you’re paying for the use of the internet you might as well make your phone calls via the web for free. ?

In the UK we seem to take for granted how easy it is for us to buy whatever it is we need at our own convenience. The true trick to saving money and debt management is to shop around for the best deal and to not automatically stick with one supplier year in year out.

Frequently look into switching your mortgage or insurance as there are constantly competitively better deals out there. Also, don’t stick with the same bank if you feel you are not getting the most out of your savings. By constantly re-evaluating your finances you’ll see where savings can and should be made and you should always monitor what you’re spending on what compared to what you could be saving.

Lastly, rather than relying on credit, mortgages and loans to buy your first homeScience Articles, save up as much as you can and give yourself a deadline to reach a certain amount. You are more likely to be approved for a loan if you have a proven record of saving and your interest rates will be lower.

Money Management
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