The way the world is at the moment, many people are struggling with finance. This might be because they can’t get jobs. Or, because they were unfortunately made redundant. People might be desperate, living paycheck to paycheck without a thought to saving any money. Not only this, but things are thought to get worse. There’s a global recession on the horizon, due to the economic fallout due to coronavirus. Essentially, people are watching the pennies like never before. If this is you, and you’re looking at some different ways to cut costs and find more money in your bank by the end of the month, this article can steer you on the right path. The problem with advice is that everyone is different. People’s financial situations are always completely different and unique. It makes it hard for you to take advice at face value. Whatever financial advice you see, you need to apply it directly to yourself and your own situation. Here are some top tips to think about.
Sort Your Mortgage Out
Interest rates are quite low at the moment. This is because banks are trying to stimulate growth. You can take advantage of this. You need to look for the best mortgage rates possible. You can do this yourself, of course, or you can use a mortgage broker like Altrua Financial. Getting a better mortgage means you pay more of the capital off your property and not interest. Essentially you’ll be paying less money each month. This is supremely important because the mortgage, for most people, is the most expensive thing they’ll ever buy. This means if you can get a better deal, the savings will be huge. You need to be careful though. Getting out of initial deal contracts can be quite hard and you’ll be better off staying in them until they’re over in a lot of cases, but as soon as they come to an end you should find better. Otherwise, you’ll end up overpaying as the interest rates from the initial deal creeps up. Always change your mortgage. There are dozens of interest checking sites available but they rarely cover the whole market so be sure to do some checking yourself.
Shed The Wastage
So many people forget about the wastage. This is money paid and forgotten. It usually happens on subscriptions. If you’re really struggling, it might be time to cancel any charity subscriptions. In the same vein, so many people use multiple subscriptions to streaming services. Cut these out. If you only use the one, then lose the others. These are usually Netflix, Amazon Video or Prime, Disney Plus, etc. Cut those you don’t use or cut all of them. If you shed the wastage then you’ll be far better off. Consider an unused gym membership. Especially during coronavirus where they’ve been mostly shut anyway. Sit down with your partner and look at all of your outgoings, then consider whether you actually need them or not and cancel as necessary. You might not think it amounts to much, but when you take them all together they quickly add up.
The Debt Snowball
Paying off your debts is never easy. In fact, it can be impossible if you’re trying to pay off all of your debts at once. But there are ways to make it easier. The first way is a recently popular one. Essentially, you make minimum payments on all of your debts, then find the one with the least amount of money left (not the least amount of interest). You focus on paying this off first. It shouldn’t take long as it’s the one with the least amount of debt. Once this is paid off, you roll over whatever you were paying to the next level of debt. Keep doing this. You’ll feel good when you clear each slug of debt. As the minimum payments disappear, you’ll have more to put into the next level of debt. It really works. However, if you have really bad deals with high interest, you may want to consolidate your debt onto one credit card. Preferably 0% interest. Or get a low-interest loan out, pay your debts off, and focus on the one lump of debt. Both are suitable ways of paying it off. If you’re in real trouble, you could end up getting some of the debt written off with government help. Be aware, this will kill your credit rating, so try to pay it off if you can.
Educate Yourself Around Financial Decisions
Going into bad car finance deals, again and again, isn’t wise. Be savvy about it. Do you need a brand new car? Do you need two brand new cars? Be careful and don’t get sucked into bad habits and decisions by salespersons who only care about their commission. This goes for a lot. Regularly upgrade your phone? Consider sticking with the current model, especially as they’re all pretty similar these days anyway. Try to pull down your monthly outgoings and retain more of your salary to do better things with. Like pay off any debts or invest for future returns.
With reductions in interest rates, these are often also applied to savings accounts, meaning they’re pretty worthless at the moment with some banks offering as little as 0.01% interest. Nothing. You’d be far better off putting your money elsewhere, especially if you wanted to hold it for a long time. It doesn’t matter how much you have, you’d do well to start an investment account. A lot of people worry about these because they might think that their money is at risk, and in certain accounts they are. However, you can go for extremely low-risk vehicles like government bonds, etc. The poor rates of saving accounts mean it’s terrible to leave money there as inflation will beat down the tiny gains you make. An investment account can make this a whole lot easier over the long term, especially if you don’t touch the money for anything and let it grow.
The Side Hustle
If you’ve got some spare time on your hand you might want to dip into a second job or “side hustle”. The money brought in can be used for luxuries, or savings, or holidays. Whatever you want. Think about how much faster debts would be paid off with a second income. Look at your skill sets. If you can write, consider freelance writing. If you can teach, consider tutoring. Anything which brings in additional money will do. You just need to find your niche. Remember, there might be tax implications if you earn a certain amount, so stay legal and be aware of what you’re doing. Having a second income helps with the little things. Even if you’re only earning a small amount of money in the process.
Selling items you own isn’t a long term solution. It’s a short term one for a quick injection of cash. It allows you to clear out all the clutter and make some money for something immediate. This can include old clothes, electricals, kids clothes, etc. You can sell them in a yard sale or bit by bit online. Again, this is great for clearing the clutter and a quick injection of cash. However, it isn’t good for long term cash issues.
Try A Budget Out
Sticking to a budget is a great way you ensure you won’t overspend, and a way of ensuring you save something each month. Simple. On one side of the table you should have your outgoings and on the other your income. There’s a huge problem if the outgoings exceed the income. It isn’t tenable and you need to make a change asap before you go bankrupt. You need to work out how much you spend on clothes and food and other essentials and then work out how much you can save. Sticking to a budget means you have more direct control over your finances. This isn’t always easy, especially if something unexpected comes up like home repair work or car maintenance. For most months though this should ensure your money works for you and that you can save some, or divert more money to paying down debts.
Change your Bank
If you aren’t getting good deals on current accounts, look around for something better. You might find something with much better deals. Some offer money off insurance, others offer discounts at certain retailers. Plus, a lot of banks offer a change bonus. So they’ll pay you to swap. This isn’t something you can do all the time, merely once every few years or so. However, it’s nice to have a little bonus and if you pick a bank with good benefits you could be onto a winner as it’ll save you a lot more money over the years. Try to cross-reference the banks’ offerings with what kind of interest they offer on savings accounts. Even if you don’t have savings, it’s good to think about the future with finance. Plus, if you and your partner do this you’ll have double the initial monetary benefit.