How to look after your money the smart way!

Increasingly it feels like your spending is spiralling, usually on things that appear to be out of your control. Petrol prices, the soaring cost of food, fines for forgetting a credit card payment, child care costs - the list goes on! All of these are things we know we just have to pay.

Here are my Top 5 Tips to help you to deal with all these inevitable costs in an intelligent and effective way....

Tip 1

The first, and often very lucrative, thing to do is to look to your bank. If you (like me!) are one of those people who looks back over the years and laments the loss of so many banking and credit card charges, then there is something positive you can do about it. You can be charged for anything from going over an overdraft to bouncing a cheque or a direct debit. There is currently a test case going through the courts, asking the banks to justify these large charges, but the good news is you can still claim now. Call your bank and ask to be sent all your statements for the last six years. Some banks may charge for this, around £10, but some do not. Go through and add up all the charges, then write a formal letter to your bank requesting their return (there are plenty of template letters to help you on the internet). I was offered nearly the full amount claimed, and I took it! You could wait for the outcome of the court case to try to get the full amount, but this could be a lengthy wait with no guaranteed results! The process for claiming credit card charges is very similar, so why not look into this too?

Tip 2

Once you have got a healthy chunk of your illegal bank charges back in your pocket, and realise just what you can achieve with a bit of knowledge and perseverance, you may well be inspired to try other avenues! Did you know that there are literally billions of pounds languishing in forgotten bank and savings accounts? You may think that there is nothing for you out there, but you can easily and quickly do a free check via www.mylostaccount.org.uk and find out for sure. I was sure I had nothing to claim, but gave it a go, and found a small savings account that had been opened in my name when I was a child, and never properly closed. I can't pretend that there were millions in there, but there was money with my name on it, and now it is safely back where it belongs!

Tip 3

Buying essentials, such as food and petrol, are ongoing necessities. Whilst these costs can't be avoided, a little time, effort and planning can make sure that you are getting the best possible deal. Petrol is a particular problem area, as over recent months the price of petrol is rising every time you drive past a station. It's going up faster in the UK than in the rest of Europe. For those of us who rely on the car, those rising prices can fill you with dread. But, just by making a few changes to the way you drive, and by planning your trips carefully, you can help to minimise these costs. Minor changes to your vehicle can increase your car's efficiency. Keep an eye on your tyre pressure (low pressure increases drag on the car and uses more fuel), de-clutter your car so you are not carrying unnecessary weight, don't fill up completely at the pump (petrol weighs a lot!) and only use air conditioning when necessary as it uses up an awful lot of fuel. Also try not to over-rev the engine, and always get into the correct gear to minimise excessive use of fuel. These all seem like small things, but if you make an effort to do them all you really can save substantially on fuel costs.

When buying fuel find the best place to fill up by going to the free website: www.petrolprices.com.  They will send you regular updates on where to find the cheapest petrol in your area. If you are taking a long trip you can check out the prices of petrol stations all along your route and plan to stop at all the best ones. Remember as well that certain stations are affiliated with loyalty plans, like Nectar cards, and all these points can add up to decent rewards, so are worth collecting.

Tip 4

Food shopping is another essential, but you can save a fortune with a bit of know-how. When to shop to pick up the bargains is a good tip, especially if you are a stay-at-home mum and have more flexibility in choosing your shopping times. Huge reductions are made as the day goes on, the first reductions tend to appear at around 10am, and if you can shop after 7pm you can pick up some huge reductions as prices are cut by 75% or more!

Huge amounts of money can also be saved from trying to replace some of your premium branded items with the supermarket's own value range. Try it with a few products; if you can't tell the difference then keep buying them! Examples that I have tried and stuck with are value cheese, orange juice and yoghurts. Other things, like baked beans and value chicken, I do not! It is all down to personal choice.

Sign up to store loyalty cards - they cost you nothing and you can reap some great rewards if you use them properly. A good example is the Tesco Clubcard. You collect points in store, double points if you use a Tesco credit card to pay for your shopping, and receive vouchers a few times a year. These vouchers can be used to pay for goods in store, but it is much more lucrative to use them to buy rewards such as holidays etc. as they are worth FOUR TIMES their value when used against these deals. I have used them a number of times and got literally hundreds of pounds off holidays and services.

Tip 5
Child care costs are one of the biggest family expenses. If you are a working parent you can take advantage of a little-known government scheme which provides Childcare Vouchers. This needs to be offered by your employer, but there are many companies that do offer this scheme. And if your employer doesn't offer it, start campaigning for change! This scheme allows for you to pay for childcare out of your gross income (i.e. before tax and National Insurance deductions). The benefit from this is substantial, and both parents are allowed to claim a maximum of £243 a month. This scheme is available to everyone regardless of income.

Another government initiative available to everyone is the Child Trust Fund. It is available to all babies born since September 2002, and you receive £250 of free money from the government to save in a Child Trust Fund of your choice. You will also get a second voucher when your child is seven. You are able to switch the money around whenever you like, so it is a good idea to keep an eye on all the different accounts to get the best deal. A lot of companies offer a Child Trust Fund and it is quick and easy to do an internet search every now and then to make sure you are getting the best rates.

Article written for Winter 2009 issue by Rosalind Kent