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Personal Finance: Fasten your seatbelt, tighten your belt, that rainy day is here

Personal Finance: Fasten your seatbelt, tighten your belt, that rainy day is here 35

By Greg Wilson, the founder of Quotezone

2020 has proven challenging in so many aspects of life and the looming financial crisis is just one more thing to tackle before the year is out.  Many households are dealing with furlough, redundancies, reduced hours – it can be a frightening time, especially if you have long-standing financial obligations such as a mortgage or childcare commitments.

It is predicted that an additional 1.5 million people in the UK will be out of work by the end of the year, the biggest increase in the jobless rate in more than a decade, creating financial strain on households across the country and a swell in unemployment claims.  Financial comparison experts at Quotezone.co.uk have some money saving tips everyone should start – to help tighten the belt in the run up to Christmas.

Instant money-saving checks…

  • Check how competitive your suppliers are – gas, electricity, phone, internet
  • Review all direct debits and cancel any luxuries you can live without
  • Don’t just auto-renew insurance policies – use comparison websites to shop around
  • Order in bulk – oil for central heating and wholesalers for groceries
  • Make sure you are signed up to any eligible government schemes – Childcare Vouchers / Child Benefit
  • Install a water meter to reduce your water bills (and take showers instead of baths)

You can take these steps further depending on how much you need to save, such as downgrading your mobile phone and internet packages and exploring energy saving tips for your house such as smart meters, draft excluders, energy efficient lighting and extra insolation.

Hopefully lockdown has created some other savings for example if you’re working from home then you could be saving on petrol, parking or tickets for public transport.

It’s also worth checking if you’re paying too much for council tax, up to 400,000 homes are in the wrong council tax band – and they have a variety of flexible payment options.

Entrepreneur and founder of Quotezone.co.uk comments:  “It’s a very confusing time to make big life decisions, especially on finance.  My advice would be to do as much research and ask for as much advice as you can then try some simple money saving steps initially – you’ll be surprised just how much you can save by trying some of the items mentioned in our instant money-saving checklist.  It’s unlikely there will be a quick win solution, it’s more realistic to spread the load by making financially savvy tweaks across your lifestyle.

“It’s also one of the main reasons why my brother and I launched Quotezone.co.uk. By bringing more transparency to the insurance process we aim to give the power back to the customer, so they can see easily what is on offer across the market, then choose for themselves what suits them – at a competitive price.  The value of being able to shop around and all from the safety of your own home has never been so important.”

Other options you can discuss with your financial adviser – and it is crucial that you do talk to a professional who knows your finances – include:

  • Consolidate – This could save you money by putting all your eggs in one low-interest basket eg by taking out a personal loan with a lower interest rate in order to consolidate the debt from credit cards with higher rates, and schedule the repayments as one manageable monthly direct debit over a specific number of years.
  • Re-mortgage – Your financial adviser might recommend re-mortgaging with a new provider offering a lower interest rate, or extending the duration of your mortgage with your existing provider – either of which could reduce your monthly mortgage payments.
  • Loans  Similarly, a secured loan (secured against your property), offers higher loan amounts than unsecured loans, usually up to £100,000 and can be repaid up to a period of 25 years – however your house could be repossessed if you don’t keep up repayments so do take care.
  • Debt solutions – Be careful with third party companies who offer ‘debt consolidation solutions’, remember to ask them about any charges they may make and at what point those charges start to be incurred.
  • Credit cards – Some credit card companies stopped accepting new cardholders during the height of the lockdown, but many of them are now returning to the market which means there could be an opportunity for people with good credit histories to tranfer their balances to a new 0% APR credit card – note there is normally a time limit here before the interest rate starts to rise.
  • Finance Deals – Normally on key household products – giving you the option to pay in bite-sized instalments, allowing you to keep any lumpsum you have saved for emergencies.
  • Take a break – There are also temporary solutions such as mortgage and pension holidays, but, as with all of the above, you should consider these thoroughly and talk through long-term effects with a financial adviser.
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