Feeling the bite of the credit crunch?
24 seven talks to the experts at Dutton Moore Accountants and Business Advisers on ways to minimise the impact of the current financial squeeze and relieve some of the pressures on your finances...
With the credit crunch and inflation continuing to bite, Tony Bullock, joint managing partner at Dutton Moore (pictured above) continues to advise that saving and cutting back now is the only way to minimise the credit crunch in your household. The Prime Minister has met with the bosses of the country's largest banks to discuss ways of relieving the ever-tightening credit squeeze, but consumers are unlikely to see borrowing rates come down for a while yet. In the meantime, we are all facing increases in household bills, food prices and fuel. Tony Bullock said: "Times are becoming harder for many households. Costs of food, fuel and bills have soared this year and most people should look again at how they can make savings in their budgets. It’s not all doom and gloom, it’s just that the squeeze has come quicker and faster than most could have predicted. It is going to be a tough couple of years for many families and now is the time to make some financial adjustments in order to protect yourself as much as possible."
TOP TIPS AT A GLANCE:
1) Review your outgoings
2) Cut down on spending
3) Save as much as you can
4) Do your supermarket shop on-line
5) Protect your credit rating and don't make unnecessary applications
6) Watch out for credit card catches
7) Look at re-mortgaging options when your fixed-term expires
8) Look at your current account interest rates
9) Cut your energy bills and save energy in your home
10) Compare insurance quotes
1. Review your outgoings
Have a look at your bank statement and see if there are any unnecessary direct debits going out. There could be unnecessary items leaving your bank account every month, like magazine subscriptions or unused gym memberships. Now is the time to cut-back.
2. Cut down on spending
Have a think about your day-to-day spending. Just by changing your spending habits slightly you could make significant savings... even down to simple things like taking a packed lunch to work could save you up to a hundred pounds a month.
3. Save as much as you can
Now is the time to save as much as you can – unfortunately that rainy day is already upon us – but don’t despair – cut back and save now.
4. Do your supermarket shop on-line
This is one way to avoid the impulse buying. You can stick to a list and a budget and keep your bills down. It also saves you money on fuel going to the shops! The current advice is to switch down a brand, plan meals and don’t buy unnecessary offers which end up uneaten in the bin.
5. Protect your credit rating and don't make unnecessary applications
A good, clean credit record is essential in the toughening market. Because banks and building societies have less funding available for loans, credit cards and mortgages, they are becoming more selective about whom they will lend to. You need to make sure your credit rating is as good as it can be in order to maximise your chances of having a credit application accepted. If you are looking for a credit card or loan, only apply for products for which you are likely to be accepted. Failed applications have an adverse affect on your credit score.
6. Watch out for credit card catches
If you owe money on a credit or store card that charges a high rate of interest, then look to move the debt over to a card with a 0% offer. However, do not be tempted to spend on that new card as well. Search on the web for the latest deals and move your debt to the best place.
7. Look at re-mortgaging options when your fixed term expires
There are still some good deals to be had, so do your homework. If you are coming to the end of your current mortgage deal, make sure you weigh up the options between moving on to your lenders standard variable rate or remortgaging with another lender.
8. Look at your current account interest rates
Most people have never changed their current account provider and still bank with one of the big four high street banks - Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland, which owns NatWest. It can pay to check out the competition. You may think there
"Just by changing your spending habits slightly you could make significant savings..."
is little point in switching current account provider given that most of what goes into your account each month, probably soon goes out again. But every little bit helps and it can pay to check out the competition. It's well worth moving to an account that will pay you more interest. And in the same way you should do your homework on bank’s charges if you are regularly overdrawn.
9. Cut your energy bills and save energy in your home
The six major energy firms – British Gas, EDF Energy, Eon, Npower, Scottish Power, and Scottish and Southern Energy - have hiked gas and electricity prices by an average of 15% this year on the back of rising wholesale costs. Check out one of the on-line comparison sites to find out who would be your best supplier for your household consumption. By entering your postcode and your consumption or spend you can retrieve quotes from all major providers in minutes. In addition you can also save money by reducing consumption. Simple measures such as turning televisions and computers off (rather than leaving them on standby), using energy efficient light bulbs, doing your washing at 30 degrees, rather than 40, and turning your heating down can all help.
10. Compare insurance quotes
Don’t just renew with your existing supplier for home and car insurances. Shop around and compare prices - and in most cases you can cut costs.
