It always makes sense to maximise your money, but it’s more important than ever in the current financial climate. You work hard for your cash, so try and pay as little as possible for your borrowing and earn as much as possible from the money you have in credit. What’s more, maximising your money doesn’t have to be difficult or time-consuming.
1. Use your ISA allowance
Handing over extra money to the taxman is madness when it is so easy to set up a tax-free savings account. You can currently save up to £5,100 a year in a tax-free Cash ISA. One of our current Cash ISA hot picks is the Alliance & Leicester Direct ISA, which offers up to 2.75%* AER tax free and no withdrawal penalties.
2. Max your money
It’s not just your savings where you can earn interest. Your salary gets paid into your current account each month and this means there is the potential to grow your money. But there are vast differences in current account rates, with many banks offering paltry in-credit interest of 0.1% compared to 5% from Alliance & Leicester and Santander. Don’t be scared of switching your banking provider – it is much easier than you think.
3. Pay less for your plastic
Don’t linger on your credit card provider’s expensive Annual Percentage Rate (APR). If you have a large balance, switch to a 0% balance transfer card and stop accruing interest charges. This way you get some time and space to pay down your debt. Check out the Barclaycard Platinum Card and Virgin Money Credit Card for long, interest-free balance transfer periods. However, you will have to pay a transfer fee (typically around 3% of the transfer amount).
4. Get the best deals
Go through each of your financial products and see if you can get a better deal. You don’t have to spend hours doing this, it’s not complicated and it won’t involve traipsing up and down the high street. Simply search and compare online to see if you can save you money on home, car, travel and life insurance, as well as gas, electricity and broadband services. You could save hundreds of pounds from just a few minutes of searching.
5. Overpay your mortgage
It doesn’t sound like a great way to save money but overpaying your mortgage each month can be a savvy fiscal move in the long run. By paying down your debt you reduce the interest you are charged, and over a period of time this can save you thousands of pounds and cut years off your mortgage term. Plus, overpaying in the current housing market can also help protect you from negative equity.
*Rates correct at 14/04/2010
