Computer glitch (The Sillahs)

By THIS IS MONEY
Updated: 00:00 EST, 16 December 2005

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Foday and Mabinty have spent a lot recently. They both regularly send money back home to relatives - £2,400 a year in total - and admit they haven't looked closely at their finances for some time.

The couple earn more than £50,000 a year between them. However, after going through their finances with his budget planner, Martin reveals - to the couple's great surprise - that they are in fact underspending by £5,412 a year, so it's pain-free saving all the way.

Martin quickly identifies some pointless expenditure. The couple is spending £130 a year on internet access, despite the broken computer. And they are paying £500 a year for a Sky TV package. A quick phone call to Sky and the threat of moving to a rival clawed back £260.

The Sillahs are spending £1,400 a month on their Intelligent Finance mortgage, which has a rate of 5.85%. Martin tells them that for every 1% you cut on your mortgage, for a £100,000 mortgage you are £1,000 better off each year. By speaking to a broker the couple move to a new deal and save £1,300.

To introduce some discipline into their sending money home, Martin suggests they 'piggy-bank' and open up specific accounts for sending money to relatives in Africa.

Opening a new account with A&L nets the couple £100 and saves them £110 on travel insurance, which comes as part of the package. They save a further £170 by changing their phone provider and £80 by getting new roadside recovery.

Searching online saves £480 on car and life insurance and a cashback credit card paid off in full each month will earn £300.

One big expenditure is Ayesha's childcare - £380 a month. Time to explain nursery vouchers to the couple. If you take a portion of before-tax salary and swap it for the same value of vouchers you pay no tax or NI. So for every £1,000 of salary spent on vouchers you make £400 - savings of £860 a year. Even better, as the couple both work for the NHS they get an extra £650 a year - £1,500 in total.

Martin manages to save Foday and Mabinty a total £4,400 a year. The couple have registered for childcare vouchers and invested in a cashback credit card. And Hadja is happy - he has a brand new laptop chock-a-block with educational games.