Improve your financial health
Falling into bad financial habits is very easy. And the worst part is, you might not realise just how financially unhealthy you are until you want to do something like save a deposit for a mortgage, or until you realise your debts have somehow spun out of control. Luckily, it’s not hard to turn your poor habits into good ones. Below are a few of the secrets of financially healthy people; adopt these as your financial mantra and you will be a financial guru in no time.
Always know your debts
Do you know exactly how much you owe on credit cards, overdrafts and personal loans? If not, you should spend some time to add up your total debts, even if you don’t consider them to be problem debts. Knowing exactly how much you owe will help you be mindful of your future spending, and this can help stop manageable debts from becoming problem debts.
Repay your most expensive debts first
If there is one rule to repaying debts, it is to repay your most expensive debts first. The most expensive debts are those with the highest interest rates, and are likely to be your store cards and credit cards. Throw all your spare cash at these debts first until you have repaid them, then work your way through the rest of your debts. As the amount of debt decreases, don’t lessen the amount you repay each month – this will make them cheaper in the long run as you will pay less interest by repaying them quickly.
Remortgage for a better rate
Every few years it is important to reassess your mortgage to ensure it is still meeting your needs. As many mortgage products become less competitive over time, you should think about remortgaging regularly in order to take advantage of a better deal with a new lender. As your mortgage payment is probably the most expensive outgoing you have each month, it is vital to ensure you aren’t throwing money away on unnecessary interest charges. If there is a better deal out there, find it and switch.
Be a shameless rate tart
It’s not just your mortgage’s interest rate that you should keep an eye on. Choose credit cards that offer interest-free purchases as an introductory offer. Once the offer ends, cut up the card and open a new one. This will allow you to borrow money interest-free in the short term. If you are looking for longer term interest-free borrowing options, check out interest-free balance transfers, and transfer your balance at the end of the intro period. This is an excellent way of spreading the cost of big purchases, without paying unnecessary interest.
Make your money work for you
If you are putting extra money aside each month into a savings account, it is worth questioning whether this is truly the best use of your money. It may be that your money will be put to more effective use by using it to overpay on your mortgage. Overpaying on your mortgage is a great way to reduce the amount of interest you will repay overall, and keep your mortgage as cheap as possible. However, you should speak to an independent financial advisor regarding this issue, as it is important to get advice that is tailored to your specific circumstances.
Please note: this website, and the articles and information within it are based on journalistic research. It does not and should not be construed to constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research. For more please refer to our terms and conditions of use.