So it’s the start of a new decade, and chances are, you have been scouring the internet for tips on improving your finances. On my own financial journey, I have found lots of little ideas, which added up to making a big difference to my finances after a year. Read on to find out more.
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Tips On Improving Your Finances
When I decided to look for ways to improve my finances… I noticed that almost every site tells you to work out your essential outgoings and regular incomings first. So that’s what I did…
Work Out Your Essential Monthly Outgoings
The first thing I did was sit down and work out my essential monthly outgoings. This included all of my bills, fuel, food, etc. I then subtracted this amount from my total monthly income to work out how much disposable income I had each month.
Knowing how much I had left after bills each month meant I could work out how best to clear my debts. I knew I had £500 per month available to use however I chose. So I opted to pay £200 of that off my overdraft. This would mean I’d have it paid off within a year. Also, I’d then have even more disposable income the next year.
Mortgage Tips via Clay Advisors
I found lots of useful tips and ideas from Clay Advisors. The one which really stayed with me essentially said…
If you were to reduce your spending on non-essential personal items by £100 per month… You could use this money to pay off your mortgage early. So that means on a £130,000 30-year mortgage… The extra £100 per month could allow you to pay it off 10 years early, as well as save you thousands of pounds in interest payments. Knocking 10 years off your mortgage seems like a no brainer to me!
Paying More Than The Minimum Payment
I have a credit card, and for a long time, I only paid the minimum amount each month. Eventually, I realised that 80% of that repayment was covering the interest, so my balance was hardly reducing. In the end, I applied for a balance transfer credit card, which offered 2 years 0% interest on balance transfers. I paid a 3.5% fee for doing the transfer, but that was less than the equivalent of 2 months’ interest fees. I then paid the same amount back each month, and I will have cleared my credit card in full by the end of the 0% period – HOORAY!
All of the above was achieve by cutting back on some activities, which were eating up a fair amount of my disposable income before. I haven’t totally given up on my treats though. I have joined Quidco, and have saved hundreds of pounds shopping via there for stuff like broadband suppliers, Christmas gifts and appliances for the new house. Additionally, I have been using groupon to get great deals on stuff like haircuts, days out with the kids and meals out for special occasions. It’s amazing the deals you can find online now!
Finally, if these tips on improving your finances have been useful, check out my Finances category.