Is simple forgetfulness or a perception that making a change will be difficult or stressful stopping you from saving you money? Every year, we Brits lose money on rising bills or increased service costs because we don’t take action. We overlook potentially significant savings that we could be using to pay off our debts or be spending on things we’d enjoy far more. Today we’re rounding up the most common personal financial offenders. Be honest, is procrastination costing you money?
Exploring utility providers and tariffs
Utility bills take up a significant chunk of our income, but on the whole, we’re still surprisingly reluctant to switch providers. It’s a problem we covered in our recent energy bills switch post and one that should not be underestimated. The truth is that many customers still find it incredibly difficult to compare the cost of electricity and gas provision because of the way they are charged and billed for energy. Some of us have been on the same tariff with a provider for many years, regardless of whether the tariff offers us the best value or not. Luckily, Ofgem has some handy information to help get your switch started.
Rejecting auto renewals
With so much going on in our lives it’s easy to forget to search for the best deals on things like TV, broadband or insurance before the end of a contract comes round. Even when renewal letters land on our doormat, it can be hard to make time for seeking out a better deal. Before you know it, you could find that you’ve been auto-renewed at a much higher cost than when you were originally lured into becoming a customer.
Marking the end of contract dates on your calendar is a good way to prompt you to be proactive about rejecting auto-renewals. It’s also worth remembering that you don’t always need to be at the end of a contract in order for it to be worthwhile making a swap. For example, many couples are put off exploring the potential savings of multi-car insurance policies because their insurance renewals are due at different times. However, if you haven’t made a claim, you could find that you’re able to exit your current insurance policy for the cost of a small admin fee, which may mean the switch is still worth making. As for broadband and TV packages – always see what the cancellation team will offer you before you roll on to the higher rate.
Monitoring phone upgrades
Mobile phones are a modern day necessity, and as consumers, we’ve become accustomed to paying for expensive smartphone handsets through our phone bills. However, without careful monitoring of when your phone contract ends, you could end up paying for your handset long after you’ve paid it off. Research conducted by Citizens Advice Bureau last year found that one in three customers on mobile phone contracts continue to pay once their contract has expired. Some providers such as O2 have promised to automatically drop the cost of monthly bills once a handset is paid off but this strategy has yet to be widely adopted. To avoid paying too much for your mobile bill, set a reminder for your end of contract date and if you can, resist upgrading your phone when you don’t need to. This way you’ll have your pick of more competitive SIM only tariffs.
Switching credit card deals
If you’ve got a great interest free or low interest credit card deal, congratulate yourself but don’t undo all your efforts by failing to make a switch once your deal comes to an end. There are fewer attractive deals on the market right now, so it pays to be proactive and seek out a switch before your introductory rate changes. Search on Choose here for balance transfer cards. Depending on your current balance, just one or two months at a significantly higher rate could undo all the savings you’ve made so far, so it’s important to take steps so you don’t roll onto that higher APR.
Current account changes
When it comes to financial products we blindly give loyalty to long-term, current accounts are right at the top. The frequent perception is that with bills, mortgages and salaries all connected to our account, making a change is too risky to take. Even a review of accounts with your current provider could prove fruitful for finding a product that’s better matched to your needs. Look a little further, and you could be tempted to stray by benefits such as cash bonuses, savings rates that beat some of the best savings accounts or better mortgage deals with certain banks. The current account switching service has been around for some time now, check it out be reassured that switching current accounts should now be totally pain-free.
How did you do? Are you taking the steps above as standard or have you put off actioning one or two? Commitment to budgeting means pushing for the best deals when you can. It may require a bit of life admin, form completion and a few phone calls but when we let our personal financial matters slide, it’s the companies and organisations who charge us money for their services who reap the rewards.