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Slash Your Direct Debits in 2011 – The Top 10

February 5th, 2011 by submit444, under Uncategorized. No Comments

As with every New Year, many of us will be filled with good intentions when it comes to our personal finances, and the internet is awash with Free Debt Advice articles offering you sure fire tips, but its key not to take your eye of the basics. Some of the biggest gains that will have the greatest potential impact on your personal finances this year will revolve around being organised with those regular monthly bills and credit card debts.

1: Switch your gas and electricity supplier: The steep rise in charges by energy providers over the winter months sparked huge uproar in the latter months of 2010, forcing homeowners to look into swap energy providers. Although, as the severe weather passes (‘touch wood’) providers are reintroducing competitive rates once more. It is no secret that utility bills consume the majority of our monthly wage, so in order to minimize the amount to spend, compare your current deal with others offered in the market. It may well be, if you have been with your current provider for a significant period of time, that you are not on the best deal available. It really does pay to shop around!

2: Cancel your gym membership: Evaluate if the amount you pay on gym membership is actually worth it. How often do you visit the gym? If the answer is anything less than regularly, it would be much more financially beneficially to cancel your gym membership and contact your local sports centre where you can usually pay as you go. Or, stop spending altogether by jogging around the local park. If you have come into 2011 with the resolution to get fit, just remember that large gyms take advantage of a surge in interest in January by raising their prices. Research by Sainsbury’s Bank last year suggested that the average gym membership costs a huge £372 a year; you could go on a cheap holiday for that! So if you can do without a membership, then don’t get one!

3: Review your TV subscription: Having satellite television installed in a home is seen as the norm in today’s society. Subscription companies such as Sky are making so much money from these deals. Are you getting your money’s worth though? How many programmes do you watch that you could actually get with a limited package instead of the complete package? For example, renting films is surely a much cheaper option than paying to watch Box Office releases. Whilst having to pay out for a TV licence, the last thing you need is to pay over £50 a month to get channels that you don’t even watch.

4: Reduce bill payments to the required level: The problem with direct debits is you can become accustomed to the set amounts being automatically withdrawn from your account. The illusion is that direct debits are a hassle free way of paying mandatory bills. However, try not to let this make you careless with how much is coming out of your account. Always check that your bills have changed if you know your usage/spending habits have changed. Don’t fritter away money by assuming that all the paperwork has been successfully put through the systems; be proactive and on top of your outgoings.

5: Move to a free current account: While it’s always useful to know what packages are available in the current market in regards to additional benefits, it can sometimes be that these ‘so called’ discounts are actually more costly than you would have first thought. A survey completed by The Guardian Newspaper last year concluded that over 7 million people in the UK spend anything between £5 and £40 a month on these package accounts. Weigh up if you actually use the additional benefits on offer to you. If not, it would be much more financially beneficial to open a free current account with no additional ‘benefits’.

6: Consolidate your debts: It is surprising how many people panic over their debt, believing it to be worse than it actually is. Obtain some professional advice if you have entered the New Year with a cloud of financial uncertainty casting a shadow over your life. Consolidation of your debts can make your repayment scheme much more manageable and you can avoid paying unnecessary amounts of interest.

7: Pay your car insurance up front: When making large purchases such as a new car it is always advisable to pay as much as you can up front. No matter how attractive deferred payment plans can look, they often incur high levels of interest, leaving you paying more over a longer period of time. If you are saving up to purchase a car, then include car insurance in your calculations. Be organised and you will end up reaping the financial benefits.

8: Switch your broadband provider: The broadband industry is one of the most competitive markets out there at the moment. With continuing developments being made to increase connection speeds and download limits, the internet business is a lucrative one. For this reason, it is imperative that you shop around for the best deal as providers are always slashing their rates. It may also save you money if you sign up to a multi-package, for example a provider that offers telephone rates, subscription charges and the internet all within the same package. This will also consolidate your service provider direct debits into just one monthly payment.

9: Remortgage: Now that Christmas and New Year is out of the way, there is a returned focus onto the consolidation of debts. Remortgaging your property could be the perfect way to release some equity to pay off your debts. Furthermore, if the introductory offer on your original mortgage has expired and your lender has transferred you onto their Standard Variable Rate (SVR) you are probably spending more than is necessary. Lender SVR’s generally have much higher interest rates than the current remortgages on offer, so make 2011 a year that you consider a remortgage.

10: Cancel magazine subscriptions: Do you have a monthly magazine subscription? Perhaps you have daily or weekly newspaper subscriptions? Ask yourself how necessary these are to your lifestyle. Do you always read them or are there put on the shelf for another time? If you enjoy the occasional newspaper or magazine then it could be cheaper to walk to your local shop to buy it if and when you want one. Such subscriptions can cost a surprisingly large amount, some totalling over £50 a year.

As you can see these ten simple steps could make a big impact on your personal finances this year, as the old saying goes, look after the pennies and the pounds will look after themselves.

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