How Martin saved the Cochranes money

By THIS IS MONEY
Updated:

 

Total saving: £12,200; pain-free saving £5,600; painful saving £6,600

Despite a tidy joint income of £59,000, this couple just can't seem to stay in the black, with a lot of cash disappearing into a property in Spain. So hardcore savings were needed on.

Current Accounts, Car Insurance, Home Insurance, Credit Card Debts, Mobile Phones Cashback Cards, Childcare, Roadside Recovery.

While the painful savings are more specific, I want to show you how you can make the same pain free savings as the Cochranes.

Current Accounts: Get a 0% overdraft and make £100.

Loyalty is a terrible consumer disease. Too many people stick with a bank account for years and years, even though it pays awful rates. And the excuse, normally its no better than 'well, I've always banked with them.'

Now you mightn't think it is too bad, but the difference between being with the best and worse bank can be four or five hundred pounds a year.

So this is a current account call-to-arms – if you're not getting a good deal out of your day to day banking, ditch it and switch it! At present, a few banks are desperately competing for current account custom, meaning some pretty spectacular deals are on offer.

You can earn up to 5% interest on the positive balance in the account, as well as a 0% overdraft for 12 months - competing with the very best personal loans.

In their frenzied attempt to suck you in, banks are also offering bonuses for opening an account, for recommending a friend to join up, for being recommended to join up, and even preferential rates on your savings. It's easy to make cash into the £100s by simply taking advantage of these offers.

There's very little that should stop you doing this, right now, today! The process of switching accounts is no longer messy and drawn out – in their efforts to impress, the new bank will usually cross all the i's and dot all the t's for you.

There are sometimes minimum pay-in amounts each month but they're not prohibitively high, and you can always cleverly shift money from a partner or family member's account in order to meet these then shift it back.

And finally, you aren't trapped. Should the terms become less attractive, or a better deal comes on the market, you can switch again.

Don't be a loyal, blinkered customer; know what you want and get the best deal from whoever is offering it. Read Martin's full article on current accounts at moneysavingexpert.com.

Existing Credit Card Debts: Slice the cost with a balance transfer.

If you're paying interest on your credit cards, STOP IT! Anyone with a decent credit score can save a fortune.

A balance transfer means you get a new card that pays off the debts on your old cards for you, so you owe the new card the money at a much cheaper rate.

There are two ways to do this: either be a tart and repeatedly shift from 0% card to 0% card or take the easy and safe route by moving your debts to a card that offers you a permanent low rate.

Read Martin's full article on balance transfers at www.moneysavingexpert.com

Cut your mobile bill, without leaving it at home.

You've a better chance of picking the winning lottery numbers than the right mobile tariff.

There are so many to choose from and each operator spins you their web about why they are better than all others.

The first port of call is to try and batter down the current cost of your contract – ringing up and asking to cancel is the sneaky trick here.

Instead of being put through to cancellations, you will in fact be transferred to the 'customer retention department' or similar. This is a snazzy way of saying that you could well be offered a special deal to stay on with your provider.

If you aren't happy with what you're offered and decide to switch provider, then there's two important stages to go through.

First, use an internet comparison site to find the right tariff for you; this will hunt out the deal which most closely matches your requirements for free minutes, texts, multimedia messages, WAP and so on.

Once you've seen the one you want, there are a number of smaller, internet based stores who can often provide tariffs more cheaply than the high street big boys.

It's possible, to get the best deal - you may have to pay full whack and then claim the money back later, but this is completely legit and will be well worth the ten minutes work of filling in the form – it can pay into the £100s per year.

Read Martin's full article on cutting the cost of your mobile at www.moneysavingexpert.com (including provider and comparison service recommendations).

Roadside Recovery – break down the cost of cover. The AA and RAC attempt to portray themselves as the fourth emergency service (never mind the insult to the coastguard).

Yet these days both are owned by big business and are there to make money - they're no longer the mutual motorist's friend's organisations they once were. The fact is you can get much cheaper cover elsewhere.

One way is to use a 'pay and claim' provider. Here, if you've a problem, the breakdown company sends a local recovery firm out to you (the average call out time is very similar to the AA), and you pay that firm.

Then you send in your receipt to the 'pay and claim' provider and they pay you back. Obviously it's more hassle, but how many times will you actually need to do it? And it's massively cheaper, as for around £30 you can get full service cover for a couple.

Read Martin's full article on Roadside Recovery at www.moneysavingexpert.com (including provider recommendations).

Home and Car Insurance: A speedy way to get scores of cheap quotes

There are big savings to be had on both these major insurance products. Obviously the main idea is to get as many quotes as you possibly can in the shortest space of time. There's a very handy way to do this by using what I call a 'screen-scraping' website. There are two of these sites.

Go to them and enter your details, then they whizz to scores of insurers and brokers to get you quotes and report back the very cheapest in about ten minutes. It's effectively an automated way of shopping around. Read Martin's full car insurance cost-cutting system article at www.moneysavingexpert.com.

Read Martin's full home insurance cost-cutting system at www.moneysavingexpert.com.

A simple way to make money – cashback credit cards!

If you have no credit card debts then apply for a cashback credit card. Don't worry I'm not encouraging you to borrow. In fact, nothing could be further from my mind.

Cashback credit cards pay you back a small percentage of what you spend on the card as a reward.

Yet there is one huge, whoppingly important warning; only ever go for a cashback card if you're going to set up a Direct Debit to pay back the card in full each month, so that you never pay any interest.

Otherwise the interest you'll be charged will easily wipe out any gains you make. If you're doing that then use the card for all your spending, replacing your Switch card and cash.

It's easily possible to gain £200-£300 a year simply by doing this. Read Martin's full article on Cashback Cards at www.moneysavingexpert.com (including current best cashback card listings)

Boost your income by being paid in Childcare Vouchers

Childcare vouchers are a hidden goldmine for parents of younger children. They can save some more than £1,000 a year. The basic premise is 'salary sacrifice,' but don't be scared by the name.

What happens is you exchange up to £50 weekly before tax salary in return for the same amount of vouchers, which are untaxed, and can be used to pay your child minder or nursery with these vouchers.

That means you only lose about £30 from your paypacket after tax, but get £50 worth of vouchers. The problem, your employer has to offer the scheme, but there are ways to persuade it.

Read Martin's full article on childcare vouchers at www.moneysavingexpert.com (including provider recommendations).

If you want to do the Make Me Rich budget planner, go to www.moneysavingexpert.com/budgetplanner

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