Top Tips On How To Beat The Credit Crisis

Simple steps you can take to help save the pennies

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House and Home

House prices are falling and mortgage rates are rising, but it is not all doom and gloom in the housing market. Make the most of a bad situation with the following tips:

If you own your own house and have a spare room, consider getting a lodger – the Governments ‘Rent a Room’ scheme allows you to receive up to £4,250 a year tax-free in rent (£2,150 each if letting jointly).
First-time buyers desperate to get on the property ladder but with no chance of a mortgage might consider asking their parents to be guarantors. This will reassure the lender and increase your chances of getting a mortgage, although remember it is important that advice is taken because the guarantors will be ultimately responsible for repaying the loan.
Advice to buyers who can wait is - be patient, house prices are falling and are likely to fall further. Make the credit crisis work for you; put the deposit you do have into a savings account to accrue interest and use the time to save up a larger deposit, which will increase your chances of getting a mortgage.
Re-mortgagers are advised to start looking as early as three months before the end of the current deal - shop around but act fast when a good remortgage rate does become available – the chances are it is only for a limited period to a limited number.
If you rent, the rental market is booming and rent is likely to rise so do not give your landlord any reason to push up prices – look after the property and pay rent on time.

Food

Food prices have risen at a rapid rate, adding nearly £600 onto a household’s annual grocery bill. Cut the cost with our thrifty tips:

Take your own lunches to work – salads, sandwiches, soup – buying all these in the supermarket can save you as much as £5 a day.
Buy fruit and vegetables that are in season- not only will you be reducing your food miles but the cost of seasonal produce is considerably lower than airlifted produce. Most fruit and veg stores and several internet companies now deliver a box full of seasonal produce to your door which can be considerably cheaper than the supermarket.
Plan your meals, research shows that the average household wastes around £6 a week through food going off – planning your meals and shopping accordingly means less food and money waste.
Visit the supermarket later than usual – about an hour before it closes- and grab some bargains- all food must be sold by its sell by date and most supermarkets wait until the last minute to do this – buy in bulk because most items can be frozen.

Energy Bills

Energy bills have risen considerably over the past year and are set to increase even more and millions of Britons are now facing fuel poverty; keep ahead of the rest by following some simple guidelines:

Insulate your house thoroughly – about a third of heat lost from an under insulated house is through the walls – you could save as much as £100 on your annual energy bill.
Use energy efficient light bulbs – they may cost more initially but they can last ten times longer and will save you money in the long run.
Eliminate drafts – double glazing and draft busters can save you more money than you think.
Look for the energy saving logo on all new electrical items – supported by the Energy Saving Trust, this could save you as much as £37 a year.
Shop around – make sure you are getting the most competitive deal in your area – energy companies can change tariffs at the drop of a hat so keep up to date with yours and switch energy provider if yours is not offering the best deal.

Debts

Keep on top of your debts in a time of no credit with our top tips:

Switch credit cards – if you have debts on yours, do a credit card comparison and then swap to a balance transfer offer that is low interest until the debt is paid.
Sit down and work out how much you can afford to pay back each month – now is the time to pay back what you owe as quickly as possible – boost your credit scoring and your peace of mind.
Work out a budget – be realistic about the essentials and the luxuries and imagine the weight of your debt being lifted off your shoulders.
Get debt advice – Speak to a debt specialist who will be able to offer impartial advice about how best to become debt free.

Lifestyle

Small changes can make a difference to your spending, change your habits today with our top tips:

Quit smoking – the average smoker wastes around £25 a week on cigarettes – you could pay off £100 a month with this and become debt free in no time.
Cut down on drinking – alcohol is highly taxed and can end up costing a fortune every weekend. Invite friends over for dinner and wine instead of spending £50 down the pub.
Cycle/walk to work instead of driving or getting the bus/train – save money and the environment and get fit at the same time.
Share books, DVDs and CDs with friends to save having to buy brand new ones each time.
Don’t dismiss charity shops – treasures can be found and remember they sell books, DVDs and CDs as well as clothes.
Go jogging or cycling in the local park instead of paying to join a gym – some gym memberships can be as much as £70 a month – buy some decent trainers instead.

The Future

Start investing for your retirement as soon as you can, pensioners are finding themselves with insufficient funds and finding they have to work for longer, retire earlier with our top pension and savings tips:

Consider investing as much as you can afford into your pension as early as possible and get the maximum tax relief on your contributions. Make sure you know how yours works and take advantage of employer contributions to boost your overall investment. Speak to an advisor who will be able to help you make the right decision.
If you own a house it may be worth looking into equity release, where you release some of the value of your property as cash to help during retirement. This is an area where impartial specialist advice is vital. The credit crisis has done wonders for savings rates, you could really profit from making the most of your tax free savings allowance at the moment– save up to £3,600 into a Cash ISA with high rates, tax free.
When you are due to retire, make sure you claim all you are entitled to from the Government, statistics show that millions of pensioners are currently missing out so make sure you are clued up.

Download Top Tips On How To Beat The Credit Crisis (586kB)