Drawing up your own budget

Well how was it for you? Alistair Darling’s debut Budget didn’t set the world alight and few of us will be too excited.

Tax has been cut to 20 per cent – but that was said last year – and the 10 per cent income tax rate has been abolished – but that was also said last year.

With energy prices, food prices, and petrol prices all on the up it was unlikely we could expect much else. So if Alistair isn’t going to be our Darling it may be that some serious cutting back is required.

MoneyExpert.com gives some top tips on how to stretch your finances that little bit further.

Flick the switch

Credit card providers may be wising up to tricks of the so-called ‘rate tarts’ but switching from your current credit card to one that offers a 0% balance transfer deal is still a great way of cutting down on monthly bills.

A balance of £3,000 on a credit card deal charging 15% APR, which is really at the low end of the scale, will cost a whacking £450 across the year. If you can switch the balance to a 0% deal that lasts for 12 months and structure your repayments to clear the debt in that time you’ll clearly make a major saving.

Credit card companies are more cautious these days so you’ll need to keep an eye out for any balance transfer fees they impose, and work out exactly which deal suits you best. The Virgin Credit Card, and the Platinum card from Barclaycard are currently offering 0% deals for 15 months and 14 months respectively.

The curse of car insurance

With petrol prices moving ever higher the cost of motoring is putting an increasing strain on the finances. What’s more, research from Sainsbury’s Finance recently found that car insurance premiums had gone up by over 5% in the last year.

If you’ve found that your premium has gone up unexpectedly you need to start looking around for a better deal, as many insurers will simply take it for granted that you’ll renew your policy and settle for second best.

If, despite shopping around, you find that a one off bill for car insurance is still too much to face there are a number of providers now that allow for monthly direct debit payment. While this spreads the cost many providers charge a fee for the privilege, so it’s important to calculate the total cost before signing up.

Current accounts to cash-in on

There have been some real shifts in the current account market recently. At one end providers are beginning to offer decent in-credit interest rates, and at the other the fees they charge on overdrafts are starting to be curbed. Now only nine providers charge 29% or over for going into the red without permission, but a number do still charge a relatively high amount.

If it looks as if you’ll be struggling to stay in credit in the months to come it’s definitely worth considering a current account that won’t penalise you for slipping into the red. If, on the other hand, you’re current account is sitting pretty you should look to make the most an account that pays you a decent rate of interest.

The Alliance & Leicester Premier Direct Account at 8.5% and the Abbey Account at 8% top the tables, though you’ll need to make the most of them soon as the rates are only for a limited period.

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