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Better off dead - six money habits that should be extinct

As Jurassic World roars into UK cinemas this week, we've taken a look at some scary money habits that really should be extinct.

None of us are perfect, but being a dinosaur with your dough can cost you hundreds of pounds. Evolve your ways and you could get a nice amount of cash to sink your teeth into.

Our six money habits that should be extinct:

Being loyal (or apathetic)

Whether you don't have the time or don't like change, you are losing money by sticking with the same provider. Switching your current account, broadband company or energy supplier are just some of the easy ways to be better off.

One of the worst habits is insurance auto renewal. You might have got a decent deal when you first bought your travel, home, contents or car policy but letting it roll over could cost you dear.

Making minimum repayments on your credit card

Though missing payments altogether is worse - and bad for your credit rating and wallet - only making the minimum repayment on a credit card debt is never a good idea.

This is because, if you pay back a percentage of the debt each month, the amount you actually knock off the debt will keep getting smaller. The means it can take years for you to clear the money you owe. And in all that time, you'll keep accumulating interest.

The best option, if you can, is to pay off the full amount each month. Failing that, choose how much you can afford and pay that same amount (or more) via a Direct Debit.

Relying on credit (and not seeking help)

If you can't make it to the end of the month without borrowing money to pay your bills, rent or older debts, speak to a debt adviser. Using credit cards or payday loans to get by could push you into a debt spiral more difficult to out run than a velociraptor. 

There are lots of organisations that can help with free, confidential advice. They can help you do a budget, prioritise your bills, talk to everyone you owe money to and see if you can agree a repayment plan.

Paying for things you don't use

How many subscriptions and memberships have you got that you don't actually use? A recent report by Topcashback found film streaming websites, gyms and magazines among the services most likely to be forgotten about yet still costing us cash.

Make a quick audit of your bank statements to see what you are regularly paying for and see if you still use them. If not cancel away.

Not using Direct Debits

Direct Debits and standing orders are a handy way to manage your bill payments.  Setting one up means you won't forget to pay, meaning you'll avoid penalties and fees for missed payments. For many of your bills, you will also save some cash if you pay by Direct Debit.

However make sure you review your regular payments to make sure you aren’t paying for things you no longer use. Also, watch out for insurance products. You'll be better off paying the full amount up front here.

Hiding money under the mattress

This is one of the worst ways to keep your cash. Money really is better in a bank.

The biggest benefit is your cash is protected, even if the bank goes bust. As long as your bank, building society or credit union is part of the Financial Services Compensation Scheme (FSCS) you'll be able to claim back £85,000. Keeping large amounts of cash at home means you could lose out if there is a fire, theft or flood, even if you are insured.

Saving your money also means you'll be able to earn interest. With current account providers competing for your business, there are some high interest rates available that don't lock your money away for years.

Are you guilty of any of these financial horrors? What other bad money habits should be a thing of the past?

What do you think?

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  • david minty / 2 July 2015

    This is good advice and worth reading.
    Thank you money advice service.

  • Derek Johnson / 2 July 2015

    In may I requested reports from the 3 agencies, none of which appeared negative BUT requests for modest mortgages ( 60% LTV private or BTL ) are rejected as are new credit cards.
    4 existing cards offer me 0% balance transfer up to 18months for 3% fee or 0% money transfers [9 mth 2%, 12 mth 2.4%].
    I have £47k BTL on £100k rental, no debt on £150k main residence.

    Pensioner with deferred state pension, thanks for advice but system appears fractured if not ruptured !!!

  • Howard Sheffield / 28 June 2015

    Hi
    I have some very old uncashed Travellers Cheques. Last year when I went to France I could not find anywhere that would accept them. How can I put them on a Euro money card without first converting them back to Sterling, please?

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    ADMIN: Hi Howard - Less places accept Travellers Cheques now, so we understand your predicament. You should contact your local post office, or perhaps try a foreign exchange specialist such as Travelex. Good luck!

  • Howard Sheffield / 28 June 2015

    Hi
    I have some very old uncashed Travellers Cheques. Last year when I went to France I could not find anywhere that would accept them. How can I put them on a Euro money card without first converting them back to Sterling, please?

  • Peter Clayton / 28 June 2015

    My experience of paying for your energy (gas/Electric) is try and pay a set amount every month to your energy provider and take note of the personal projection provided by them,if you are able and stick to that projection you may be lucky and build up some credit so in the winter months you can still manage your account but hopefully not have any big bills in feb/march.

  • Peter Clayton / 28 June 2015

    A word of caution remember that if you are in a contract with your mobile phone or energy supplier you may have to pay an exit fee if you switch deals before that contract ends

  • Lorena Secades / 28 June 2015

    A good an interesting article,

  • Thomas JP Muldoon / 28 June 2015

    Good advice. Thank you.

  • Catherine Platt / 28 June 2015

    It's good to be reminded of these, I didn't check my car insurance renewal quote until too late. This year I will. Thanks

  • Phenuel Gadebo. / 28 June 2015

    Hi, Thank you,the advise
    is very benificial.I now know
    i got future.

  • Robert Fidler / 28 June 2015

    Some good pointers. However Knowing your insurer and what your policy covers can take some time to understand. Insurance policies I would suggest are designed to be "complicated" shall we say.the comfort of knowing your insurer means a lot.

  • Graham / 28 June 2015

    VERY BASIC ADVICE BUT OH SO NECESSARY !

  • Ann Breaks / 28 June 2015

    Could my debt company take all my pension,or can i still pay my monthly payments.

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    ADMIN: Hi Ann - If you have a debt-related question, our debt advice locator tool can help you find free, confidential advice local to you - https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator. I hope this helps.

  • Karen / 28 June 2015

    Finding ways to help people with money is a good service but this should be in schools and six form to avoid all the debt later on and habits that are becoming a normal part of life.

  • Iain McGregor / 28 June 2015

    so much of what you buy is superfluous ..all you need is a shirt on your back , food in your belly and any roof over your head...everything else you spend can be saved...

  • Iain McGregor / 28 June 2015

    so much of what you buy is superfluous ..all you need is a shirt on your back , food in your belly and any roof over your head...everything else you spend can be saved...

  • Frances White / 10 June 2015

    Very clear and sensible advice, many thanks