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In an economic climate where the cost of living is rising significantly faster than wages, it is unsurprising that many of us feel like we're left with very little at the end of the month. Stretching your payslip to finance costly energy bills, high petrol prices, mortgage payments and taxes is often challenging enough as it is, not to mention having to deal with other living costs such as food and household items. Forking out for all of these items can make saving up and paying off debts seem near impossible for many people.
Unfortunately, there is no magic wand, no genie in a bottle and certainly no money tree sprouting leaves of cash. However, sometimes making seemingly small adaptations to how you manage your finances can free up valuable funds to help pay off debts or save for the things that are important to you.
When it comes to things like our weekly grocery shop, most of us do not go to the most expensive supermarket out there, purely because we know that we can get the same items cheaper elsewhere. However, often the prospect of reviewing the market for the best deal is overlooked when it comes to other purchases such as lenders, providers and financial products. The bottom line is that just making simple and often quick changes to your providers and lenders could save you thousands every year. This goes for everything from your energy bills to your savings accounts. With the number of different financial products on the market nowadays, there's excuse for you to have anything other than the deal which gives you the most for your money. Instead of accepting the low interest rates of the traditional savings account you've had for years, you could benefit from locking some away in a high interest fixed rate bond, or getting the most of your tax-free allowance in a Cash ISA. With regards to other bills, it may be worth comparing your current deal with the other providers on the market to see if you could fuel your house or phone for less.
The reclaim game
Often, people are apprehensive about questioning bank charges that they are unsure of. However the reality of the matter is that even banks make mistakes, but it is the responsibility of the consumer to remain vigilant and check all statements and charges. If there is something that you do not recognise being taken from your account, you should never be afraid to ask the question. Late charges and penalty fees from banks can be crippling for those already in financial hardship, soif you think they are unfair, you should contact your lender as soon as possible.
Tax. Although there are evident benefits to us from paying our taxes, for many people, the costs of council tax and income tax can be sapping to our finances. Very few people realise that they are well within their rights to dispute their council tax banding and their income tax code. If you feel that too much tax is being taken from your wages each month, you should endeavour to get your tax code reviewed. If you receive a council tax statement which seems extortionate then you should contact the council and go through the banding review procedure. Obviously, there is no guarantee whatsoever that these will be changed, however, if it does come to light that you have been categorised wrongly then you could receive a refund for previous payments and you could be required to pay less in the future.
Reassess your regular payments
Another area where many consumers get stung is with repeat payments. That gym membership which you signed up for in January, then went once and never returned are you still paying for it? Many people sign up for subscriptions for magazines, websites, television channels, clubs and insurance products and just simply forget about it. The reality is that if you are paying for a service which you are no longer using, you could essentially be throwing away hundreds every year.
With both direct debits and standing orders, you have the right to cancel whenever you like. If you have been mischarged a direct debit, your bank have a responsibility to help you recover the cost. Most online banking accounts have a section which allows you to see all direct debits and standing orders leaving your account - often with the option to cancel them online. Recurring payments, however, can be slightly more difficult to identify - this is because for this type of payment, the lender takes the long card number from which to debit the payment, as opposed to your bank account details. Often, recurring payments may show on a statement under a company name you do not recognise. The good news is that you can still cancel these by talking to your bank, however, they may require more vigilance to decipher.
Do not suffer in silence
Burying your head in the sand is one of the worst mistakes to make when it comes to financial difficulty. You should never feel like you are alone as the truth is that we are in an economy where many people are struggling. This has led to financial advice and free debt help being plentifully available in order to help people take control of their finances instead of letting their finances control them. By making small steps, realistic goals, and manageable changes. it is a real possibility that you could help yourself out of the red.
This post was written by John Hughes who is the resident blogger at www.independentfinancialadvisor.co.uk, a site that provides access to financial advisors as well as to debt advice charities for those struggling with their debts.