MAKEOVER: Give your finances a New Year makeover
Emma HarrowingAll this week the Life Matters team will be looking at the ways you can improve different aspects of your life in 2010. In part one EMMA HARROWING sees how easy it is to save money by giving your finances a makeover.Emma Harrowing
All this week the Life Matters team will be looking at the ways you can improve different aspects of your life in 2010. In part one EMMA HARROWING sees how easy it is to save money by giving your finances a makeover.
When it comes to my finances I tend to bury my head in the sand a lot of the time.
Bank statements are sometimes not even opened and are definitely not looked at in detail. I've set up direct debits for utilities such as telephone, electricity, water and gas and I forget about them, I don't even check to make sure that the right amounts are leaving my account. I often go slightly over my calling credit on my mobile phone each month, but I don't have the time to sort out a better deal. When I go food shopping I don't stick to a budget, in fact I haven't even set out a budget for what I can and cannot afford. Needless to say a week before payday I often run out of money or I have just enough to only eat beans on toast all week.
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I admit that I am not good when it comes to money. But I like to think that I'm not alone.
I want to change my financial outlook but I'm not sure where to start. I would love to be able to put some money aside every month so that I can easily afford a holiday or I have a nest egg should anything happen to my house or car.
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The thought of seeing a financial advisor never crossed my mind. After all, surely you only have a financial advisor if you have a lot of money invested in savings and bonds or stocks and shares or you want to buy property.
Yet talking to independent financial advisor and Life Matters money expert Ian Minns this is not the case. Anyone can get financial advice regardless of how much money they have, in fact if you find yourself in debt or financial difficulties seeking the advice of a financial advisor can help ease the burden and in most cases this advice is free.
So armed with bank statements, utility bills and other financial paperwork I set up an appointment to see Ian for some free impartial advice on how I can improve my finances for 2010.
I felt a bit nervous when I went into Ian's office. What if he told me off for not having any savings? What if he judged me on how much I spent on food and going out? What if he thought I was a bit na�ve and dim as I lacked money management skills? What if he realised I had no money management skills?!
I needn't have worried. Ian immediately put me at ease and we were soon talking about the ways in which he could help me get my finances well and truly sorted out. He didn't judge. He didn't scold. He was friendly, approachable and full of practical advice.
First of all he asked me what I wanted to achieve out of my financial makeover (which was to save money rather than run out of money before the end of the month).
We then worked together to come up with a list of how much I spent each month on utilities, food, mortgage payments, insurances, loans, car, clothes, going out and other expenditures.
Going through my bank statements helped with this. As this was an exercise that was new to me I discovered that there were a few anomalies with my account as extra payments had been taken out, which I was not aware of. Just by going through my bank statements I was already saving money.
The other areas Ian thought I could save money on are:
Broadband - according to Ian I am paying far too much for my broadband when there are many cheaper internet options out there. He talked me through various options including combining my telephone, cable and internet into one monthly payment.
Personal loan - Ian says that by transferring personal loans to an interest free credit card I can save money in the long run as I will not be paying additional interest. The only downside to this is that most no interest credit cards are only no interest for a limited amount of time, which means that I need to remember to transfer the balance to another no interest credit card before the end of the agreement.
Food - Second to my mortgage, I spent most of my monthly wage on food. The weekly supermarket shop along with trips to the coffee shop and work canteen, plus the occasional meal out added up to a hefty amount.
Ian helped me save money on food by setting an amount I could spend each month. By making my lunch instead of buying lunch out would save me a good few pounds each month.
Car - I used to commute to work and so I needed a good car to get me to and from work. Now that my situation has changed and I walk to work I only use my car at weekends and for short trips. Therefore I don't really need such a big car. By selling my car for a cheaper model I will not only have money to put in a savings account, I will also be saving on insurance and tax.
Utilities - From looking at my utility bills Ian thought that I could save money so he put me in touch with Tom Durrell from Brighter Energy.
Tom is a domestic energy assessor and goes into people's homes to see how energy efficient they are. He also gives tips on how to save money on your utility bills.
Says Tom: 'As well as assessing the energy efficiency in a home I also work for The Utility Warehouse, which is a company that can offer the householder all their utilities from one source.
'Having your gas, electric, broadband, landline and mobile on one bill helps you see how much you spend each month on utilities so that you can budget accordingly.'
The Utility Warehouse also offers a Discount Club card, which can help you reduce your utility bills by 30pc.
The card works by helping you budget for food, clothes and other lifestyle purchases each month. All you do is decide how much you can afford to spend on these items each month and top up your card with that amount. You can then use the card like a debit card, but instead of the money coming out of your bank account the money is taken from the money you have budgeted on the card.
You do have to pay one off �10 payment for the card, plus a further �2.73 per month to cover membership fees and 35p each time you top up the card, however, if you shop in one of the many shops that have formed a partnership with The Utility Warehouse you get 5pc cash back on what you spend. This will then be taken off your utility bill.
Shops that offer this 5pc cash back include Sainsbury's, Topman, Topshop, Boots, Argos, House of Fraser, Comet, Halfords and Homebase. Therefore as you spend money on your usual food, clothing, DIY, health and beauty products and household and electrical goods you can reduce your utility bill at the same time.
For me this service is ideal. Currently I spend about �45 a month on my broadband and landline and around �55 a month on gas and electricity. As I shop in most of the shops that offer the 5pc cash back facility, I could save a minimum of �30 a month (before any cash back discounts) if I switched to The Utility Warehouse and I would have a faster broadband speed.
It felt good to get more control over my money. Although daunting at first Ian put me at ease and gave me some great advice on how to save money in the year ahead.
Just by making a few tweaks here and there, by consolidating my utilities into one monthly bill that could be reduced if I buy my food and clothes from selected stores, and by setting a realistic monthly food budget I could save in the region of �120 - �130 a month. This money I could put into a savings account just in case I need money in a hurry or I want to take a nice holiday.
For more money saving tips see today's Norwich Evening News (on sale Monday January 4, 2010).
Don't forget that you can get free impartial financial advice from Ian Minns just by clicking on our Life Matters Ask the Experts section on the Life Matters homepage.