Steps to Cut Unnecessary Spending

Some of the money we spend is money that we don’t actually need to spend. This isn’t about treating ourselves now and again, but about the things that we later look back on and think “I shouldn’t have spent that.”

Nobody can completely cut out this kind of unnecessary spending, but keeping it as low as possible can be a huge help in maintaining your financial health.

Avoid Impulse Buying

Due to the very nature of impulse buys, this one can be easier said than done. All the same, impulse buys are probably the ones we are most likely to regret so try to curb buying things on the spur of the moment. Possibly the best way to manage this is to try to be more aware of when something you are thinking of buying is an impulse. When you are on the verge of buying something but you think you might be doing it on impulse, make a point of stopping, pausing, and thinking it through.

Chew Gum in Shops

Odd as it might sound, chewing gum can help you curb unnecessary spending. More precisely, if you find yourself buying food unnecessarily because you are listening to your stomach, then chewing gum while food shopping can put a stop to it. The act of chewing sends signals to your brain that help reduce your appetite, and the minty taste will distract you from the imaginary flavours of biscuits, chocolates, and crisps you pass in the shop. Studies have shown this makes you less likely to buy food you don’t need and, if you happen to be trying to eat healthily, will probably have another reason to regret besides the cost. As an added bonus, there’s also evidence it helps stimulate the brain.

Avoid Takeaways

Takeaways are a really expensive way to eat. While their appeal is obvious – they combine quick, convenient meals with addictively good taste – they are neither good for your budget nor your waistline. If you are really stuck for time and energy to cook in the evenings, even ready meals are a significant step up in cost though are not exactly great either. The best option is to simply familiarise yourself with some quick, easy, low-effort recipes that you won’t mind cooking after a long day of work or buying foods that are more-or-less ready to eat without being expensive.

Mobile Phone Contracts

A lot of people could save money on their mobile phone bills one way or another. Are you on a pay-as-you-go plan? Unless you are a very, very light user you could probably get a contract that would be cheaper, and get a free phone as a bonus. Do you find yourself never even approaching any of the limits on your current contract? Then you may well be able to get by with a cheaper bundle next time you renew. It is also worth comparing providers when you renew instead of sticking with your current network, as you may get the same phone and contract for less from a different company.

3 Apps for Better Budgeting

smartphonesSmartphones and tablets are incredibly useful tools. They are incredibly multi-purpose, thanks to the fact they are essentially fully-functioning miniature computers.

Mobile devices are good for a lot more than surfing the internet and playing addictive games in your free moments. One of the many things they can be useful tools for is budgeting and money management. Three of the best apps that can help you keep your finances under close control are:


Goodbudget, which was formerly known by the slightly less catchy name of Easy Envelope Budget Aid, is an intelligent household budgeting tool. At its core, it is designed to handle the simple but useful task of helping you keep track of your incoming an outgoing funds and how the two balance against each other. On top of this basic principle, however, it adds a number of features that help you to budget as effectively and efficiently as possible. For example, it helps you to group your outgoings and budget into separate categories. If you install the app on multiple devices, then the app offers automatic syncing so that any changes you make on one device will be automatically updated on all others as well.


PriceSpy is a price comparison tool.  In principle it is much like the price comparison websites you may use to find the best insurance deal or telecoms provider, but rather than focussing on these kinds of services it instead compares prices on everyday, physical products. This makes it easy for you to find the best deals on things you want to buy, automatically collecting and comparing prices from both online and high street retailers. As well as comparing prices at any given moment, you can create and save lists of wanted products in order to keep an eye on prices and offers. You can also use your phone’s camera to scan the barcodes of products you find in-store to bring up key information about the item and check out prices online.

UK Salary Calculator/SalaryBot

The UK Salary Calculator (iOS only) and SalaryBot (Android) apps allow you to calculate your actual, take-home pay after tax and national insurance as well as things like pension contributions and student loan repayments. This might not seem like something that will come in handy as often as the others but it can still be a useful thing to have. Most of us tend to know our gross salary more readily than our take-home pay, so this can help you convert one to the other for budgeting purposes. This can be especially useful if your salary is variable or your hours irregular, in which case it can help you work out how much you have actually earned ahead of each payday. If you are considering a change of job, it can also be invaluable in working out how much you would really get paid in any position you are thinking of applying for.

Should you Switch Your Mortgage?

MortgagingIt is certainly well-known that switching is a way to save money. Utility providers, insurers, and most similar companies will give you a good deal for a year or two, then once the contract runs out you need to look elsewhere if you don’t want to end up paying over the odds. Whether we actually do take the time and effort to go elsewhere is another matter, but at the very least we all know that we should.

Switching a mortgage, on the other hand, is something that a lot of people are less willing to consider. It takes more effort than just changing energy or broadband provider, and it is often harder to work out whether you are going to be better off. Even so, if you are on a fixed mortgage but the initial rate has come to an end it can be well worth looking into the question of whether you should remortgage and take out a new fixed deal.

Why Switch Mortgage Deals?

While there are other reasons you might want to remortgage, the best reason to switch mortgage deals is simply the same as the reason for changing car insurance provider when you renew; to get a better deal and save money. On a fixed-rate mortgage deal, once the attractive initial rate has run out the follow-on rate you are moved onto tends to be much higher, often more than double. This means monthly repayments are higher, and of course that you end up paying more. Switching to a new fixed rate deal will get you back onto an introductory offer and save you money – quite a lot over the full term. It will also lock you into that better rate for anything from two to ten years. This could be an even bigger advantage when rates go up, which current forecasts suggest will happen by early next year.

About Switching

There are likely to be fees involved with switching mortgage deals. Essentially, rather than simply moving to a different provider as you would be with other kinds of switching, you are taking out a new mortgage and using it to pay off the old one. As such, there are likely to be fees involved with taking out the new deal, and there may be early repayment fees on the old one. You will usually be able to add these fees onto the new mortgage so you don’t need to find the money all at once.

The question of whether it is worth switching is a slightly more difficult one. Essentially, all you have to lose aside from the time and effort involved in taking out the new deal are the fees. These are most likely more than balanced out by the lower interest rate, and lower monthly repayments also serve to make the mortgage more manageable. The only way to be certain you will gain on the deal, however, is to crunch the numbers. Online calculators make it easier to work out the repayment costs of your current mortgage and possible new deals, making it easier to figure out how much you would save and compare that to any  fees involved.

The Best Ways to Use Credit Cards

Credit Cards 2Credit cards can be a troublesome debt like any other if allowed to get out of control, but used properly they can be a useful financial tool. They can help you spread the cost of purchases, cover emergency spending or simply buy essentials when you don’t have cash to hand.

Some of the best ways in which credit cards can be used wisely and result in a real financial benefit include:


If you have little credit history or are trying to recover from a bad rating, credit cards are ideal. When you go shopping, simply use your credit card to pay for something that you could have paid for in cash. Then, use the cash to pay off the card before any interest starts to build up. In terms of your credit history, you have repeatedly borrowed money and proceeded to pay it back very promptly and in full. This looks good to future lenders, and helps you build and strengthen your credit rating –all in a much more safe and affordable way than other kinds of borrowing entail. If your credit rating is bad, you can probably still qualify for a card but interest will be high so take extra care to pay off quickly.

Spreading Big Costs

A 0% card can be used for spreading bigger costs such as car insurance, up-front yearly line rental payments, and even purchases of second hand cars from dealerships. All of these examples represent things that are cheaper if paid up-front, but potentially more manageable when paid in monthly instalments. The monthly instalments are essentially credit deals from the provider or seller, and more expensive because interest is incorporated into monthly repayments. If you can access a credit card offering a better rate – preferably 0% – then you could make the purchase up-front with that card in order to access the cheaper price. Then, to clear the debt on the card, repay monthly over the same period in which instalments would have been due but at a lower rate.

Making Ends Meet

Credit cards are relatively expensive forms of borrowing. However, if you get in a tough situation where you really need to make ends meet while you wait for payday, they are an infinitely better choice than the payday loans which are marketed to people in exactly this situation. Even the most absurdly expensive credit cards make the interest rates of payday loans look reasonable. However, you should still be careful to ensure that it really is just a matter of tiding you over until payday or generally  a short-term matter that you will be able to pay back before it becomes a problem. Credit cards may be a lot better than payday loans if things do go wrong, but you should still approach borrowing in financial difficulty with great care.

Three Steps to Cheaper Borrowing

CashBorrowing money, when approached carefully, can be a useful way to get access to money you need but currently don’t have to hand. The downside, of course, is that you will pay interest and ultimately repay more than you borrow.

Naturally, when borrowing you will want to keep the interest as low as possible and generally minimise the amount you repay. Three simple steps can do a lot to help make your loan as cheap as possible.

Shop Around

Shopping around is arguably more important today than it has ever been. This is true of many products, and loans are among them. Countless providers in fierce competition introduce a vast array of deals, and the internet makes comparing those deals quicker and easier than ever. Don’t just head to one lender – even one you’ve been reliably told has reasonable rates – and accept what they offer you. Make sure to look at comparable loans elsewhere to locate the best rates. Make sure you understand the costs in full, though. Are there any charges besides interest, such as early repayment charges if you shift your debt early?

As well as checking out different providers, it is well worth checking out different types of finance. It is surprising how far some types of credit overlap and how different their charges could be. To take an extreme example, if you have a reasonably good credit score and only want to borrow a few hundred pounds for a short time, there is no point resorting to high-interest and risky payday loans (which are rarely if ever advisable) when you might be able to take out a credit card with 0% on purchases and a sufficient spending limit.

Borrow More

This one seems counterintuitive, and only works in quite specific circumstances, but it is definitely worth checking before you take out your loan. Loan providers usually offer better rates for bigger loans, and there are very distinct cut-off points between the different rates. If the amount you want to borrow is close to the threshold, then borrowing a little more could result in a lower rate that ultimately saves you money.

For instance, a good but attainable interest rate for a £2750 loan over five years at present would be around 15%. Boost your borrowing to £3000, and with a little luck and a fair credit history you could get under 8%. The latter will see you pay back under £3650, compared to just over £3925 with the former. In other words, borrowing £250 more will see you pay back nearly £300 less in total.

Repay Early

Once you have your loan, the best way to keep the interest down is simply to repay early. You should do this if at all possible, as the difference can be very significant (though beware of any early repayment penalties that could offset some of the benefits).

Pay above the minimum each month if you can in order to shift your debt early. Aside from some money “for a rainy day” it is better to put money towards your debt than into a savings account due to the disparity in interest rates, so while you may not like parting with extra money in the short term you will be better off once the loan has been cleared.

Building an Effective Financial Buffer

A financial buffer is a sum of money you have put by “for a rainy day.” In other words, it is money you have to ensure that any sudden or unexpected problems will not leave you struggling financially. Examples of the kind of disaster that your financial buffer can protect against include repairing or replacing your car after a breakdown or expensive work that needs to be carried out on your home.

Building up an effective financial buffer that will be enough to protect you from all manner of disasters can seem difficult when finances are already tight. However, a few steps can help you put together the best buffer possible.

Gathering Funds

Even if your finances are tight, it is a good idea to put what you can aside to form a financial buffer. Otherwise, if any unexpected expenses do arrive, you could find yourself in a very difficult situation. If you don’t have much to spare, it is a good idea to build up your buffer slowly through regular contributions. Work out what you can spare each month, and put this into your bank account to form part of your buffer. Ideally, this should be a fixed regular amount. However, if your income is variable you may have to work out just how much you are able to put aside on a month-by-month basis.

The Role of Debt

Usually, it is not a good idea to build up any savings while you are in debt. The amount you gain from savings will be outweighed by the amount you lose from accruing interest on your debt. However, financial buffers form the exception to this rule. It is a good idea to put a little aside if you can just in case of an emergency rather than putting every penny towards your debt. However, do not forget that meeting at least your minimum repayments takes priority if you find yourself in the unfortunate situation of having to choose.

Where to put It

If you are lucky, you will not need your financial buffer for any emergencies and it will end up just being savings for the future. However, it is different from other kinds of saving. You may need to access it at short notice, so as tempting as it can be to boost your buffer with high interest rates you should not tie it up in any account that makes access difficult. Place it into an easy access savings account with online banking so you can near-instantly return it to your current account if needed. Alternatively, consider putting it into a high-interest current account if you can meet the conditions. This will make it readily accessible on your debit card, and may give better interest than easy-access savings accounts.

Making a New Car More Affordable

Car PurchaseThere are a number of reasons you need a new car. Maybe it is your first car, or maybe you are upgrading to something that better suits your needs. You may simply fancy a change, or your trusty old warhorse may have finally given up the ghost and would cost more to repair than to replace. Whatever the case, a new car can be an expensive purchase. However, there are a number of ways you can make it more manageable.

Look Around

If you can afford to take your time, then shop around for the best deal. If you need the car urgently, then at least check out multiple garages and, assuming you are looking at second hand vehicles, private sellers. Not only will this let you get the best deal in terms of financial outlay, but could potentially mean you get a better car for your money which could be hugely beneficial in the long run.

Consider All Finance Options

If you need to buy a car on finance, don’t just accept the dealer’s finance options. There are multiple alternatives out there when it comes to financing your new car purchase. Third party car loan providers, or personal loans not specially designed for cars, may offer better rates. This may also make it possible to effectively buy a car from a private seller on finance, borrowing the money from your chosen lender and repaying it monthly as you would a dealer’s finance deal. However, it is true that dealer finance is sometimes more accessible.

Think About Fuel Economy

A car isn’t just a one-off cost but an ongoing one. Fuel economy will have a major impact on how much it costs to keep it on the road. Getting a car that gets more miles to the gallon could easily counteract a slightly higher initial price tag. Diesel cars offer better fuel economy than petrol ones, even when the higher cost of diesel fuel is considered, but cost more to buy when new. As such you will only benefit if you use the car a lot. When buying a used car, the price gap between petrol and diesel tends to be smaller so a diesel is more likely to be beneficial.


When you buy a new car, you will naturally be taking out a new insurance policy. Use comparison sites to find the best deal, and consider using a cashback website to bring the effective cost down. Cars can differ significantly in insurance costs, so if you are looking at more than one vehicle get some quotes online before making your choice. This will allow you to consider insurance cost differences when making your decision and potentially save money.

Is P2P a Good way to Borrow?

Peer-to-peer lending (P2P) has got a lot of attention recently and a number of headlines in the news. However, this has been driven by the announcement of plans to allow P2P loans to be placed into ISAs for tax-free returns, so most of the media coverage has focussed on the point of view of the lender. But what about taking out a peer-to-peer loan? Is the prospect as attractive for borrowers as it can be for lenders?

Who can Take out P2P Loans?

The question of who exactly is eligible to apply for a peer-to-peer loan depends very much on the provider. Some only cater to small businesses, while others also provide loans for individuals. They also have varying acceptance criteria. For example, some will only accept individuals with a very strong credit rating, while others will accept those who don’t have quite such a stellar history (albeit requiring higher rates to compensate their investors for the higher level of risk). If you don’t think you are eligible for one provider, don’t let that stop you looking for another that seems more appropriate.

Note, however, that most P2P loan providers require at least a fairly good credit history. You will also probably have to pass the lender’s own credit tests as well as being subjected to a traditional credit check through a third party credit referencing agency.

Advantages of P2P Loans

One of the advantages of taking out a P2P loan is that they tend to be more affordable.  P2P providers cut out many of the “middleman” activities that are present when taking out loans from banks and traditional lenders and they do not have the same expenses as other types of loan provider. As such, the rates they charge tend to be noticeably lower than you would get from other sources, especially if you are taking out a loan relatively short-term.

You may also have a better chance of successfully obtaining a loan, or of borrowing the full amount you require, from P2P lenders. There are several reasons for this. One is that, if your credit history is imperfect, you may be able to find investors who are willing to take on a small amount of extra risk for higher returns. The fact that the interest rate is also generally lower than when borrowing through a traditional bank somewhat lowers the chances you will struggle to repay, which could potentially help your case. On top of this, P2P lending offers greater flexibility as the funds for your loan could come from multiple people. If nobody is willing to lend you £10,000, there might be four people willing to contribute £2,500.