EXPERT • May 2020
If there’s ever been a time to think more carefully about your money, it’s now. But, whether it’s trimming bills or keeping an eye on debt, how can you get on top of all that dreaded admin without letting it get on top of you? Financial blogger and writer Iona Bain shares her insider tricks for shoring up your finances. You might even find you collect some Avios along the way…
It won’t happen on its own: schedule in 30 minutes once a week, or whenever you can feel the issues start to build up. I recommend ‘eating the frog’ first thing. You’ll handle a tricky phone call, such as haggling with your mobile provider, or complex sums, such as working out how to pay back a credit card, much better when you’re fresh and about to start the day.
We all have urgent problems to fix, medium-term challenges to overcome and longer-term goals to achieve. Urgent problems might include paying off those getting-you-down debts, while a medium-term challenge might be cutting bills. A longer-term goal could simply be a comfortable retirement. If you’re serious about your finances, commit to taking steps in all three areas each week.
For those who usually collect Avios on flights, your balance can just as easily be topped up at home and, eventually, help you to make big travel savings by paying for your travel with Avios completely, or using Avios part payment. Spending on any of the British Airways American Express® Cards1 can help you build up your Avios balance; the British Airways eStore allows you to collect Avios on every £1 you spend online shopping at more than a thousand retailers while e-Rewards will give you an instant 600 Avios just for signing up and completing your first survey.
To find out more about the British Airways American Express® Cards, click here
Find the deals you deserve: ring around your home and car insurers, as well as your broadband and mobile networks, and ask what they can do for you. No joy? Move to a new provider through GoCompare (up to 2,800 Avios), Compare the Market (2,500 Avios) or USwitch (up to 2,500 Avios) via the British Airways Avios eStore. Review all your direct debits and subscriptions once a month and ask if you’re getting full value. If not, ditch them.
Use a budgeting app, linked to your main spending card, which visually demonstrates where and how you spend your money. The Monese app will track your Avios; the American Express® App has shopping and dining offers and Money Dashboard is a very useful budgeting app for those happy with their current bank. It’ll highlight what you really value. Ring-fence a handful of luxuries and try savvier substitutes for everything else. For instance, a home coffee machine could easily replace those mindless morning lattes.
Schedule a direct debit for your savings: ten per cent to start with, increasing this as your income rises (or recovers). Schedule it to go out on the day after you’re paid – ideally you want your ‘argh’ fund to be able to cover your bills for three months. Or try putting your savings into Premium Bonds from NS&I, with a small chance to win cash prizes. Alternatively, there’s peer-to-peer lending. Your money won’t be protected here, so it’s risky, but you can earn 1.5-2 per cent with the likes of Ratesetter.
Avoid feeling trapped by expensive debt by starting with your ‘real’ take-home pay and aiming to spend and save within it. Devise a monthly debt repayment plan to get you back on track. And don’t put off remortgaging – deals are competitive right now and moving away from an expensive standard variable rate could potentially save you thousands of pounds.
Investing just £500 into a tax-free ISA through the likes of Nutmeg could make those longer-term goals, such as buying a home, a reality rather than just fantasy. There are no guarantees with investing but, if you’re looking to make the most of your money over the longer term (i.e. over five years), a stocks and shares ISA offers the possibility of better returns. Better still, you can collect 2,500 Avios when you open or transfer an account with Nutmeg. Capital at risk. Tax treatments apply. Terms and conditions apply.
1. The British Airways American Express Cards are offered by American Express Services Europe Limited. Registered Office: Belgrave House, 76 Buckingham Palace Road, London SW1W 9AX, United Kingdom. Registered in England and Wales with Company Number: 1833139. American Express Services Europe Limited is authorised and regulated by Financial Conduct Authority.
Illustrations by Neil Webb