Take Control Of Your Finances

If you consider that the combined amount of personal debt in the UK has reached £1.3 trillion it’s obvious that our spending habits need to change. Long gone are the days of boom of the early nineties, when credit was cheap, house prices increased and no one was even thinking about the dreaded ‘R’ word. However, at the start of a new decade we find ourselves in an entirely different, and sadly more difficult, economic environment. With all this accumulated debt, it’s not surprising that a lot of people are struggling with their finances. If you’re looking to make big financial changes in 2010, then here are four pointers to get you started.

Say Goodbye to the Plastic

If you’ve accrued credit card debt that amounts to over £1000, and you don’t have a 0% bonus rate on that debt, the chances are you’ll be accruing significant interest payments. This can be amended quickly by getting a balance transfer credit card that offers a 0% bonus rate for a limited time. Take out one of these cards, transfer the balance, and then pay it off without interest. Put all of your spare money into paying this off and be sure not to accrue any other credit card debt in the meantime.

Take Sandwiches to Work

Many people have seen it become customary to go to and buy a £2 coffee, or buy some pre-packed sandwiches during their lunchtime break. What they don’t realize, however, is that buying food in this way is seriously expensive. Making your own lunch everyday, be it some sandwiches or boiling up some pasta, can amount to some great savings. Just think, if you're spending only £3 for a sandwich and coffee everyday then that's £15 a week, or £60 a month. Make it yourself and you can cut this bill in half, saving yourself close to £400 a year.

Pay Off Debt Before Saving

If you've accrued substantial personal debt, then opening a savings account is a bad idea. If you can't overpay your mortgage then you might want to save up until you can, but otherwise make sure you focus on paying off your debt. Debt almost always has higher interest rates than savings accounts, so if you have debt and savings, you won't be getting the most out of your money. Make sure you pay off your debt first. Once it’s gone, it’s time to start saving properly; reputable banks such as Santander offer good rates on  savings accounts – take a look at their site for the details.

Consolidate Your Credit Cards

If you're in substantial personal debt then it's probably worth considering a loan in order to consolidate that debt into one manageable monthly payment. If you have a number of outstanding credit cards, for which you’re paying around the 15% AER mark, then taking out a loan at 8% and paying off all the cards in one go is a good idea. After this you’ll only have to manage one monthly repayment at a lower rate.