Maggie Fleming looks at how to get the best deal from your credit cards.
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Everybody I know seems to be making resolutions about going to the gym and getting into shape. But Christmas isn’t just tough on the tummy – it’s tough on the pocket as well. So here are a few resolutions you can make to get your finances into shape, too!
- Before you do anything else, resolve to get rid of any debts. Take a long, hard look at what you owe and make a budget and then stick to it. You may be able to transfer a stubborn existing credit card debt to a new card offering 0% interest on balance transfers, as I suggested last month.
- Save some money every month. Once you’ve got rid of your debts, you should build up an emergency fund for dealing with things like unexpected repair bills and for tiding you over if you were to lose your job, for example. Ideally, the fund should contain 3-6 months’ net salary. I recommend you put the money in a mini-cash ISA – at present you can save up to £3,000 a year taxfree in these, although the maximum allowed will go down to £1,000 in 2006. If you want to save more than that, you should put the excess in an account offering high interest and instant access to your money. Accounts operated by internet or post often have the best rates. You should pay by monthly direct debit – that way you won’t be tempted to skip a deposit.
- Review your mortgage. If you’ve been with your current lender for more than a few years, it may be worth your while to move to a new lender. It’s a very competitive market and the banks and building societies will offer you introductory discounts to remortgage with them. Some will even pay the valuation fees and legal costs for you. Ideally, finds a flexible deal that allows you to overpay without penalty. Before you move, though, make sure that your current lender will not charge you a penalty for going.
- Make a will. This is the only way to make sure that your belongings go to the people you want them to go to. At present, the laws of intestacy mean that if you die without a Will, your assets pass to your relatives. This will change soon under the new Civil Partnership legislation. If you and your partner register, you will have rights to each other’s estates. But, even so, it’s still tidier to have a will. If you already have a will, make sure that it’s up to date and doesn’t leave everything to your ex!
- Review your pension contributions and think about increasing them. Most people in the UK aren’t paying anywhere near enough to provide for a comfortable retirement. So don’t stick your head in the sand unless you want to work until you’re 80. If you’re not sure what you should be paying, talk to an independent financial adviser.
- See our full list of gay finance News stories -
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