Five easy ways to organise your finances in 48 hours

Read on for our five step guide to sorting out your finances and making the most of your money.

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by Victoria Bischoff on Jul 11, 2010 at 00:01

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Five easy ways to organise your finances in 48 hours

1. Debt

Your first step should be to work out how much money you owe and what the interest rate is on each of your debts. Then see if there is a way you can make your debts cheaper.

With the average interest rate on credit cards currently at around 16 – 17% APR, rising to as much as 30% APR on store cards, it is worth investigating 0% balance transfer deals.

A 0% balance transfer card eliminates your interest payments for a set period of time, allowing you pay back your debt faster and for less. However, keep in mind there is usually a handling fee.

Right now the most competitive 0% deals on the market last for around 15 months. If you think you will need longer than this to repay your debt consider applying for a long term low rate deal instead. Although this means you will pay some interest on your debt, the rate is usually set at a much more affordable level and you will have a little more breathing space to clear your balance.

Once you have made your existing debts as cheap as possible, you need to decide on a repayment plan.

For example, if you have numerous debts aim to pay off the balances with the highest interest rates as a priority while paying the monthly minimum repayment (MMR) on the cheaper debts. Once you have cleared this balance, you can then move on to the debt attracting the next highest rate of interest and so on until you are completely debt free. You can find out more about dealing with your debt here.

2. Utility bills

Make a list of all your bills, detailing how much you pay, when they are due, who your provider is and what your payment method is. Then tackle each bill individually to make savings.

The golden rule to remember is: When it comes to utility providers, loyalty is rarely rewarded. To ensure you are not paying over the odds for you bills it is important to regularly shop around and compare different prices.

It is also important to remember that right now many of the cheapest deals are online. For example, according to Ofgem switching to an online energy tariff could save you as much as £300. (You can read more on cutting your energy bills here.)

Be aware you can also make savings by simply changing how you pay your bills. These days, many companies offer customers substantial discounts for agreeing to pay by direct debit or opting for online, paperless billing.

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4 comments so far. Why not have your say?

ISAs are a waste of time if you don't pay tax. The charges on them make them less effective as an investment and you can claim tax credits on your savings in a Building Society or other fund.

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I agree with Eric. The first thing is to check that you and/or your spouse are using all their personal allowance before going into ISAs.

Insurance cover is difficult to bottom out completely because of bundling and the return is often peanuts.( I have three basic forms of Car Rescue Service but cannot reduce to one and get the cover I want).

Similarly it is difficult if you have bundled energy supplies to come up with a like for like comparison despite the U-switch type calculators. Accounts are complex and always changing. Same with Broadband suppliers

House and car insurance are the biggest areas of variation in costs and potential savings. They are easy to compare as they are single annual figures and provide best return for your time. I cannot believe what some of my friends are paying because they do not search the market. If you do your research once and keep a spreadsheet record you will soon cut down time in ensuring the next time that you are getting a good deal and it is easy to keep subsequent like for like comparison informaton on things like insurance policies.

FInally if you are retired you can increase your disposable income by upto 5% by spending some time, but not a lot, managing your money.

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I have bought a flat in December 2009. At that time I used my credit card and overdraft to pay the down payments. Now I have been trying to get a credit card so that I can use that 0% balance transfer facility. None of the credit card companies is willing to give me a credit card. I sought for loan to the banks at a cheaper rate. None of them likes to give me any loan. I am now paying 18% to MBNA and 20% on over drafts. It is so difficult for me to pay all this interest. I need to reduce my interest payment immedaitely. Please could anyone help me, advise me what to do. Thank you,

Firoz

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Dan

Jul 12, 2010 at 10:36

Firoz,

I'm sure you are aware of this, but you should have NEVER used a credit card/overdraft to put a deposit on a house.

I found myself in a similar position in that no credit card company would offer me an account on the leading deals. I had still a balance on my 0% purchase credit card at the end of the 12 months and, although I have the money to pay it back I was not willing to if I could get another 0% deal.

In the end I took out the Santander Preferred Overdraft account which will match your previous overdraft (subject to status) Initially I got nowhere near what I needed but the put a query on it and they did match it, so I now have another 12 months to pay off my debt with no balance transfer fees.

My credit card balance was not too high though and I only needed about £2k overdraft, might be a problem if you need more, but at least it will help somewhat to reduce your interest payments.

Cheers

Dan

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