Friday, 24 May 2013

Frugal Friday...

One of our many savings piggies & pots...

We've just made another small lump sum over payment to our mortgage - hurrah! This was once again "unexpected money" saved up over a few months so we really didn't notice the going of it, it's not a massive amount but will make a nice little difference to our mortgage, and will be of far more value to us being paid there than sitting in a savings account earning not-very-much interest at all!

One thing that people tend to forget is that financial products need looking after, and regular maintenance. I'm not talking just about feeding a savings account - although of course if you have excess income and the luxury of saving a good lump of it each month, that's great. HRH The Cat's insurance was due for renewal last week. I'd had a good look around, been through a couple of comparison sites (including managing to get a small chunk of cashback from one just for getting the quotes) and finally had rung the current provider to inform them that I wasn't too impressed at them increasing the premium by 20%! Because she's getting older we know that costs will increase over time but I certainly don't see that as a good excuse for Insurance Companies to be trying it on! Sure enough in the course of the phone call they dropped the premium right down to just 6p more than we were paying last year, too, which we were happy with. I even called from a freephone number so the call didn't cost a penny!

Another financial product worth keeping a close eye on is savings - particularly ISA's. Assuming you're a UK taxpayer you should have one of these - if you're nervous about locking money away then go for an easy access one and it's the same as any other savings account, except that you don't get taxed on the interest earned by the contents. In my book this is a bit of a no-brainer. You go out to work, earn money, and get taxed on your earnings. If you manage to save a bit, and earn interest, you get taxed again on that interest - I mean, the cheek of it! we have no intention of paying any more tax than we have to - we both pay what's due without quibble, but when it comes to paying more where we don't need to - no thanks, ISA's all the way! We just have the one ISA which we transfer about from year to year depending on who wants to give us the best interest rate. You can open a new one each year with a new provider but that could get complicated over time, and we don't have vast millions to worry about! (Shame!) A lot of accounts start of with a special "bonus rate" of some description - our current one has a bonus rate which expires in October so I'll be on the hunt again then for something better.

This one is all mine and does precisely what it says on the...ummmm...tin! 
Another one then - life insurance! Come on, hands up, who took out life insurance when they got their mortgage and hasn't given it another thought since? Maybe your circumstances have changed, and your existing product wouldn't even cover you any more, or you're simply paying for more cover than you now need having been OP'ing your mortgage, or clearing debt? It's well worth having a dig around to see what's out there - we went from paying over £100 a month a few years ago for several different policies to paying just £40 per month for one that definitely covers us and gives us everything we would need. As life, accident and illness cover policies aren't something that you renew annually, they tend to slip through the net when people are reviewing their finances. I've got a reminder set for a year or so's time to look again at this too - maybe it will reduce still further, who knows! In the meantime, that extra saving we made was added to the regular mortgage overpayment!

Finally, with holidays very much in mind, what about travel Insurance. I have a confession to make here - we haven't renewed our travel insurance for the past two years. Now now, stop sucking in air through your teeth like that - the reason is that we have our current accounts with one of the financial institutions who offer FREE travel insurance as one of the perks of having an account with them. best of all, the account is a free one in the first place! Assuming that you don't bank with the same people as us, then travel insurance is another thing well worth not simply renewing on auto-pilot each year - if you just go on one trip a year, then single-trip cover will probably work out far better for you than an annual policy. If looking at annual multi-trip cover, or of an age when finding an insurer to cover you is getting trickier and premiums are increasing, then a packaged bank account that for a monthly fee (typically £10 or £15 a month, sometimes more) offers you a range of other products bundled in with it - perhaps mobile phone insurance, travel insurance and breakdown cover - might be worth considering. The key thing as with any insurance though is the check that the policy will actually cover you. For us for example, there's no point in buying just any old breakdown cover policy for the car as not all of them (even the big providers) cover outside mainland UK - meaning that we wouldn't be covered while we are in the Hebrides - and we can be certain that one of these trips, that's going to be an issue. Just not this time though, please!

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