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Saturday, November 12, 2011

Making the Best of Your Money

This is a guest post. 

A quick glance at the news headlines most days will reveal that the global financial crisis is still very much with us. All over the world unemployment is high and money is tight, and this is as true in the UK as it is anywhere else. Making ends meet is probably more challenging now than it has been for the best part of fifty years.

So, every penny has to go as far as it possibly can, and it's not easy. Banks are working hard to attract new customers, though, so good deals aren't too difficult to find, and the addition of Santander to the UK marketplace has added extra competition to the traditional big four, offering more choice on everything from mortgages to travel insurance.

Aside from making sure that your monthly outgoings don't exceed your income, the current climate is particularly challenging for savers. The low central interest rate from the Bank of England means that current accounts and savings accounts aren't offering great rates, and in fact, there are hardly any accounts that can beat the rate of inflation. This means, that for savers, money that you're putting away is actually becoming less valuable with every passing day.

The universally agreed best solution, then, is to put money into a mortgage, if you have one. It seems unlikely that interest rates are going to rise for at least another year, which means that mortgages will stay cheap for a fair while yet. Every penny that you put in now, with the internet rate so low, goes that much further to paying off your mortgage than it would have done five years from now. Additionally, if house prices rise, you'll have more equity in your house, meaning if you need to release cash in the future, you can always do so.

Another tip for making sure that your pennies go a little further is to make the most of some of the offers around at the moment. Santander, for example, are one of several banks who offer special rates and unique accounts to people who have other banking services with them. If you have a mortgage with one bank and a bank account with another, it's worth going in and talking to someone to see if you can get some extra benefits from switching your account (or your mortgage).

Despite the financial gloom, there are always good deals to be found, although you may have to do a little bit of paperwork to make the most of them. Nonetheless, it's definitely worth the effort, and doing some research now could help you save a lot of money in the long run.


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