As stock markets and house prices lurch downwards, we suggest some simple steps to strengthen your finances.
1. Be better at budgetingThe people most at risk during
downturns are those who, knowingly or unwittingly, live well beyond their means.
Of course, constantly spending more than you earn is a recipe for financial ruin.
However, in recent years, raised consumer confidence (bolstered by seemingly ever-rising
house prices) has masked Britainâs spendthrift ways. Thus, itâs vital to build a
strong foundation to your personal finances by learning how to budget.
So give our Personal Finance software a trial to help you to budget better.
- 2. Massage your mortgageWith over 11.8 million mortgages in the UK, close to half of all UK households have a hefty debt to service every month. Indeed, the interest alone on our £1,218 billion of home loans exceeds £6 billion a month. Of course, as with all debts, the secret to a happy home loan is to minimise how much you pay in interest and fees. By remortgaging, you can try to trim your monthly repayments down to size.
- 3. Bash your borrowing On top of mortgages, weâve also built up an impressive £231 billion in non-mortgage debt, such as credit and store cards, car and personal loans, and overdrafts. To avoid paying excessive rates of interest and sky-high fines for unauthorised borrowing, it makes sense to tidy up your existing borrowing. For example, by transferring your card debts to a credit card offering 0% balance transfers, you can freeze interest until as far ahead as January 2010.
- 4. Prune your premiums Another good habit to adopt is to avoid automatically renewing your insurance policies. In other words, when your yearly renewal notice arrives, donât just lazily accept your insurerâs latest premium hike. Instead, shop around in order to find quality quotes for car, home, life and travel insurance. Your aim is to get the same or better cover for less cash and, thanks to the wonders of the Web, this is quicker and easier than itâs ever been.
- 5. Strengthen your savings