January may be a tight month, but it is also one where you can take a few simple steps to have a better financial start to the year.
Sally Francis, a senior writer at MoneySavingExpert.com, explains five things you should consider after a month of excess.
Check you are getting the benefits you are entitled to
This includes checking your child tax credits and marriage allowance. You could be thousands of pounds better off, according to Ms Francis.
Tax credits should be renewed annually, so be sure to check that you are still eligible.
“Check if you’re entitled to help with childcare costs via the Childcare Element of Working Tax Credits. Some women can be thousands of pounds better off a year, though it only applies to households with an income under £46,000. To renew, look out for a renewal pack in the post around May time. If you’re making a fresh application, you’ll need to call the tax credit helpline on 0345 300 3900.
“If that’s not you, you could still save with childcare vouchers through your employer. These enable you to pay out for childcare from your pre-tax salary via salary sacrifice. New members are only allowed until April 2018, though the Tax-Free Childcare scheme is due to launch this year. Eligible families will get 20 per cent of their childcare costs paid by the government.
“Also, if either you or your spouse are a non-taxpayer, and the other a basic-rate taxpayer, you could be eligible for a £432 tax break called the marriage tax allowance. Apply via HMRC to check.”
Get rid of unnecessary direct debits and reduce household bills
Direct debits for old gym memberships or obsolete phone insurance often continue coming out of bank accounts for longer than they should without people realising, says Ms Francis. Get rid of any still active on your account.
“Also consider your household bills – ask yourself when was the last time you checked to see if you’re getting a good deal and switch, switch, switch. Energy, broadband and TV are pain-free ways to save hundreds of pounds a year, especially where you end up with the same company but paying far less than you were just by switching your deal. With energy, do a quick comparison and with broadband and TV, if you’re out of contract, give your provider a call and see what discounts it’ll offer you to stay.”
Maximise your loyalty points
Collecting loyalty points may feel pointless, but it’s important to take a “pennies make pounds” approach. The trick is to determining where you will get the most value for your points.
“Clubcard points are usually better spent on vouchers for restaurants or days out as you can get four times the value of your points back – £2.50 in store could be £10 in selected restaurants. Nectar offers vary, but it does have regular promotions allowing you to double up your points in store, to spend on clothing, electricals, toys and more. Stash your points for these things and you get more for your money.”
Make your shopping cheaper with the ‘downshift challenge’
Perhaps the most obvious but rarely practised suggestion of them all. Simply buy cheaper versions of the everyday products you use.
“Next time you head for the supermarket, try downshifting the products you buy. So, let’s say you always buy branded cereal or fruit juice. The brand one level down is likely to be the supermarket’s own. Give that a try and if you or your family can’t taste the difference, stick with the cheaper brand.”
Switch bank accounts
Considering banks seem to relish charging customers, make sure you find an account that will also be generous in its rewards.
“If your bank doesn’t reward you, or you’re fed up of its service, you can be paid to switch – typically around £100. Some banks will also give you cash back on the monthly bills you pay by direct debit. You’re likely to have to satisfy minimum pay-in criteria, but if your salary or your partner’s salary is paid into the account, that should cover the requirement.
“Switching isn’t the hassle it used to be either – it can be done in as little as seven working days. Best of all, the new bank does the leg work of the switch for you, contacting your payees and informing them of your new account details and eventually closing your old account.”