Parents Send Your Finances Back to School

By: MoneyFacts

As parents breathe a sigh of relief as the kids go back to school, now is the perfect time to take stock of your finances and teach yourself a few things about personal finance. 

Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:        

“A well-deserved sit-down to sift through your income and expenditure will highlight any areas you need to tackle. Fixing your finances sooner rather than later will lift a massive weight off your shoulders and make things far more manageable.”

Switch your current account

“Many of us are loyal to our current account provider, even if they offer us nothing in return for our fidelity. However, now that the seven-day switching service is in operation there’s no reason not to switch, particularly as there are many enticing offers out there. For instance, some accounts pay up to 5% in interest, albeit with some funding restrictions – a rate that easily beats the best savings accounts.”

Balance transfer deals

“If the summer holidays have taken a toll on your credit cards and you are unable to pay off your balance in full, it may be worth considering a balance transfer deal. There are currently 13 deals on the market with absolutely no balance transfer fees, meaning you can move your debt at no cost. However, the balance must be repaid before the introductory deal ends to avoid interest adding to your bill.”

Current account money transfer

“With the average authorised overdraft rate standing at 15.76% EAR, it’s unsurprising that relying on your overdraft can become a costly affair. A more cost-effective option could be to use your credit card to top-up your balance: a handful of credit cards allow customers to transfer funds straight into their bank account for a small fee, and if this is done with an introductory offer, customers can benefit from even greater cost-effectiveness. However, borrowers must always pay off their credit card balance in full by the end of the deal to make this a worthwhile solution.”

Look at cashback and reward cards

“Cashback and reward cards are a great way to earn tax-free cash and rewards on your everyday spending. Some cards offer excellent introductory deals, which are great for those with a big purchase in mind or who are looking to benefit from their Christmas spending. However, if you don’t spend during the introductory period, you will lose out, so this will best suit regular card users.”

Set up a regular saver for next summer

“If the summer holidays take you by surprise each year, why not prepare for the cost of next summer with a regular savings account? By setting up a direct debit from your current account you can easily build up a sizeable pot. Regular savers often trounce other flexible savings accounts: the average rate paid on a regular savings account is currently 2.27%, which dwarfs the 0.67% paid on the average easy access account.”

Opt for a fixed rate mortgage now

“If you are currently sitting on your standard variable rate (SVR) or are coming to the end of a fixed rate deal, now is the perfect time to look for a better offer. Mortgage rates are currently at all-time lows, so borrowers can save a significant sum by opting for one of these low-priced deals. In fact, by opting for the average two-year fixed rate of 2.81% instead of staying on the average SVR of 4.84%, you would be £1,996.56 better off after just one year.”

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