Media alert: Five money habits that should be extinct
Friday 12 June 2015
As Jurassic World roars into UK cinemas this week, Money Expert Andy Webb from the Money Advice Service has 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 us hundreds of pounds each year. Here are some tips to help us all evolve our ways and save an amount of cash we can really sink our teeth into.
1) Make it extinct: The Auto-renewasaurus
We’ve all been drawn in by a great subscription deal from our gym, broadband provider or insurance policy, but letting this roll over could be costing you dear. Whether you feel like you don’t have time to cancel or switch, or simply don’t like to change, you could be losing hundreds of pounds each month to the auto-renewasaurus.
21st century tip: Cancel those autorenews and consider switching providers
Take half an hour to go through your bank statement and pick out any regular payments for subscriptions. Ask yourself if you are making the best use of them and if the answer is no cancel the subscription. There is more information about how to cancel subscriptions on the Money Advice Service website.
You could also be saving money by reviewing your service providers for energy, broadband and insurances or by switching bank accounts. There are some great deals out there at the moment so take a look at the Money Advice Service website for tools and information to help.
2) Make it extinct: The Veloci-credit-raptor
Relying on credit to make it to the end of the month could push you into a debt spiral more difficult to out run than a velociraptor. If you are using credit cards or payday loans to pay your bills, rent or older debts, speak to a debt adviser. 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.
Where to go to get free, confidential debt advice https://www.moneyadviceservice.org.uk/en/tools/debt-advice-locator
3) Make it extinct: The minimum-asaurus
Although this is preferable to missing a repayment altogether which would impact on both your credit rating and your wallet, only making the minimum repayment is never a good idea.
If you pay back a percentage of the debt each month, the amount you actually knock off the debt will keep getting smaller. This means it can take years for you to clear the money you owe. And in all that time, you’ll keep accumulating interest.
21st century tip: Pay off as much as you can each month
The best option is to pay off as much as possible each month. Choose how much you can afford and pay that same amount (or more) via a Direct Debit.
4) Make it extinct: The Tyrano ad-hoc-asaurus Rex
We’ve all been there, you get the email about your monthly bill which you fully intend to pay on pay day or on an ad-hoc basis and then promptly forget it until you receive a warning that you’ve been charged.
21st century tip: Pay by Direct Debit
Setting up a regular direct debit or standing order can help you avoid penalties and fees for missing payments. For many bills, paying by Direct Debit can save you money as well. It is worth reviewing these regularly to make sure you still need the items you are paying for and that you are getting the best deal.
5) Make it extinct: The Bronto-matressaurus
One of the worst ways to stash your cash is to hide it under the mattress. Money really is better off in a bank where it is safe and secure and you can help it grow.
21st century tip: Pop it in a bank account
Putting your money in a savings account will allow you 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. If you are considering making long term savings then take a look at ISAs and savings accounts. Find out more about choosing a bank account here on the Money Advice service website.
The Money Advice Service has plenty of information available to help you make the most out of your money. Just visit www.moneyadviceservice.org.uk
For more information or to arrange an interview with a Money Advice Service spokesperson, please contact Pressoffice@moneyadviceservice.org.uk
NOTES TO EDITORS
About the Money Advice Service
The Money Advice Service is an independent organisation. It gives free, unbiased money advice online at moneyadviceservice.org.uk, over the phone on 0300 500 5000, and face-to-face right across the UK. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.