Beat the credit crunch by saving money

The average British credit card holder is in over £2000 of debt. We spent years buying what we wanted when we wanted it but it’s clear from the recent slump in retail sales that the time has come to tighten our purse strings and rein in our spending. Here are a few tips on how to save your money and make the most of what you already have in the recession.

Mortgage: The mortgage is the most expensive outgoing for a lot of people. Your home is the most important thing you own, and definitely something that it is worth taking out a loan for. But that doesn’t mean that it’s an inevitable burden we all have to bear. Shop around a bit and make sure your deal really is the best one for your situation. There are thousands of alternatives out there, you just have to make sure you’re getting the most out of your options. Overpayments are not a bad thing – if you find yourself with a bit of extra cash to spare, don’t keep it aside to fritter away on things you don’t need, make extra payments on your mortgage whenever you can and you could save thousands on interest in the long term.

Credit cards: Resist. Try not to spend money you don’t have, if you can’t afford to pay it off that month, don’t buy it. Try to pay off any debt you owe as soon as possible (don’t just pay the minimum each month if you could afford more) and if you don’t think you can resist spending more on your cards again, cut them up. Make sure you don’t go beyond your means.

Car: Owning a car is a really expensive business. It’s not just the cost of the car itself but road tax, maintenance, insurance, servicing, MOT… The list goes on and on. Think carefully about whether or not you really need a car. If you can’t live without one it might be worth considering a car contract hire agreement instead of buying one outright. You pay for the car in manageable monthly instalments and often they will throw in other additional extras like road tax or servicing costs as well. You just need to shop around for the best deal. And the best thing is that often the more desirable car you choose with contract hire the better deals you can get – you could find yourself with a car you would never have been able to afford to buy outright, even in better times!

Sell sell sell!: If you have clutter and unused things around your house, don’t just turn a blind eye to them or dump them off at your local charity shop. If you’ve got a cupboard full of clothes you don’t wear or gadgets you thought would be useful but never used, there will be someone out there who will want them. Ebay is brilliant, it’s quick and easy and once you get a bit of practise at advertising on there you could find yourself making a nice little extra bit of cash out of your old junk. Give it a go – you’ll never know unless you try!