Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%
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Author: Internal Customer Services Agent
Simple steps to saving money and boosting your savings
According to one survey the average British household debt is £13,000.00 and this is not a figure to be ignored. Our technology based existence means our ability to access goods and services is greater than ever and as such consumers are using a variety of different lending resources at their disposable. This could be anything from a credit card, a payday lenders, store cards as well as other loans specifically for the likes of car purchases. With this in mind it is little wonder that the average credit card balance of a consumer in the UK is £2000.00. Although this as a singular figure sounds like a relatively small amount, when considering the real term of repayments this would generate, the story is actually very different. For consumers who have higher levels of disposable income monthly repayments of £100.00 may be possible and in such cases a credit card carrying an interest rate of 17% would be cleared after a two year period. However, given that many UK households use their disposable income for a variety of different things, coupled with the fact that as a collective, UK households are increasingly used to factoring credit based commitments into their budget, it is likely the preferred monthly repayment would be much smaller. Instead let’s look at a £30.00 per month repayment towards the same £2000.00 balance. In this example it would take a terrifying 17 years. With this basic example in mind it is easy to see why, given our modern-day ability to excess credit, it is more important than ever that savings are made wherever it is possible to do so. Even in cases where a British household has the average amount of debt of £13,000.00, repayment of this could be long and drawn out. Say for example a more than reasonable 6% interest amount was applicable and again we use the example of £100.00 as the monthly repayment, the term would once again be 17 years.
Thankfully there are in fact numerous different ways that consumers can save money. In fact some money saving tips are simple and straight forward but actually very important to the overall picture. First and foremost is the somewhat golden rule of clearing your most expensive debts first. For most of us this will be the credit cards given the interest rates and proposed minimum repayments which many of us take advantage of. In reality the minimum repayment of credit cards and their balances is not going to result in the debt being repaid in anything like the near future. Instead focus on credit card balances first and repay as much over the minimum repayment that is affordable to do so. The second example for saving money is considering the use of a pay-as-you-go mobile phone. Many of us find ourselves in increasingly expensive mobile phone based contracts and in reality, we are not getting true value for our money. Many of us like to have the very latest version of a smartphone, without in fact considering if the features it offers truly meet our needs. As such we end up paying in the region of £40.00 to £70.00 for a device which we didn’t need in the first place. When using a pay-as-you-go device plan you of course need to keep what you may consider to be an ‘old phone’ but the true benefit of doing so is the cost you will be spending monthly overall by comparison.
Another way we could all save money instantly is the humble shopping list. Given that all our major supermarkets are competing on quite a massive scale nowadays, as consumers we are continually being faced with new and ‘exciting’ offers when we visit one. As such and as intended, we then find ourselves potentially buying a whole host of goods which in reality, we really did not need. Using a shopping list will ensure you buy what you need and nothing more. Draw comparisons between the cost of your shops when doing so; it will be surprising how much can be saved when using a list. Whilst we are in the supermarkets there is another massive money saving exercise which exists and this is buying own brand goods. Many of us are loyal to products and goods and as such prefer to stick to what we know, however, this may not always be the most cost effective option. Many of the own brand goods are much cheaper and actually nowadays do not compromise on quality.
These are just a few simple and almost obvious examples which could be taken advantage of right now. Thinking about your spending and whether it really needs to take place, will over time, help build upon the strength of your financial picture as a whole.