Personal finance management advice and tips

Saving money in times of economic uncertainty is an important concern in many households. Unfortunately, saving money in an economy marked by negative equity, high unemployment and high cost of living is not all that simple. Significant savings can be made, however, by applying relatively small adjustments to the management of insurance policies, mortgages, credit cards, budgeting and savings. Provided below is a short guide to achieving such savings.

Insurance

Insurance policies are essential for saving money in so far as they provide financial protection from hazards such as theft, fire and flood. Buildings and contents insurance are necessary for homeowners wishing to protect their property, while car insurance is obviously a legal requirement for all vehicle owners.

In times of economic uncertainty, it is important to review all insurance policies with the aim of finding the cheapest premiums. Hundreds of pounds can be saved each month by switching insurers, while it is sometimes cheaper to take out multiple forms of cover (i.e., motor, home and life insurance) with the same provider. The golden rule is to always shop around: if a cheaper premium is found, it is advisable for the insured to contact his or her existing insurer to discuss a possible reduction before committing to another provider.

Mortgages

Although initially expensive, mortgages can be made more affordable if the first several years` premiums are paid early. Subject to the terms and conditions of a particular mortgage, employing an aggressive repayment strategy during the early months and years can save thousands of pounds in interest. Under the right conditions and subject to availability, remortgaging can also save significant quantities of cash each month if a cheaper lender is found.

Credit Cards

Credit cards are useful for spreading the costs of purchases, especially for people whose credit profiles are particularly healthy. Paying off a credit card balance over time at a low rate of interest can help to preserve disposable income, which could be used to supplement investments or savings. Unfortunately, not everyone is eligible for a low-interest credit card, meaning that many people struggle to pay off credit card debts.

Shuffling debts between credit cards - that is, transferring the balance of the most expensive card to that of the cheapest - can save money each month. Equally, savings can be made by applying for a credit card that offers an introductory interest-free balance transfer. Moving all debts onto one card with a 6, 9 or 12-month interest-free period can provide substantial savings.
Refinancing (e.g., securing a low-interest loan to pay off all high-interest credit cards) is also useful for saving money, while it may be possible to reclaim thousands of pounds in Payment Protection Insurance (PPI) for missold loans and credit cards.

Budgeting

Personal finances can also receive a boost by budgeting more carefully on a day-to-day basis. As the cost of living increases - particularly in the context of higher energy bills, inflated petrol prices and more expensive food shopping - it is worth considering how and where small savings can be made.

Shopping can be managed carefully by visiting several shops for items that would cost more if purchased from one supermarket. Significant savings can be made on toilet roll, for example, which can be bought in large supply at commercial wholesalers. Shopping around for cheaper energy rates, switching telephone suppliers, driving cars more carefully to save fuel and installing a smart meter in the home can also save money on everyday bills.

Savings

Finally, savings accounts are useful for generating interest on disposable income. Finding the best deals on savings accounts is a necessary step towards ensuring a more secure future. Savings can be stimulated or supplemented by low-interest loans, the affordability of which can be assessed using a loans calculator, or by investing wisely in gold, silver or platinum.