Summer spending season is here

Premiership clubs are heading for a £300 million summer spending spree as clubs gear up for the next season bringing in new stars and giving new contracts to existing stars.

Man United have splashed out around £50 million of that total bringing in Portuguese stars and Bayern Munich’s Owen Hargreaves while rivals Liverpool have given new lucrative contracts to Steven Gerrard, Jamie Carragher and Jose Reina.

Summer spending won’t reach the same levels for the rest of us but even if you’re not going away on a holiday there’s still plenty of pressure on the wallet.

Summertime and the spending is easy

Whether it’s spending on the garden – sales shoot up by around 45 per cent at this time of year – or spending on barbecues and eating out there’s plenty of opportunities to splash out. The good weather goes to our heads and it’s more tempting to go for a drink.

Days out at the seaside are reckoned to be worth around £6 billion a year to the UK economy as families and trippers splash out.

Even if the sun fails to shine the cash is still being spent as we take advantage of the longer days to relax a little.

Don’t let it go to your head

Relaxing in the sun will be easier if you’ve got your finances sorted in time to make sure you’re not burning a hole in your wallet as well as risking sunburn.

Make your money work for you now by applying a bit of financial discipline and you’ll be sitting pretty when the sun really starts beating down.

Sort out your priorities

More than 2.3 million homeowners with fixed rate mortgages are risking increases in their monthly repayments of as much £207 a month if they don’t hunt down a more competitive deal.

Those at risk are the smart ones who fixed their mortgages in 2004 when average rates were 5.3 per cent or 5.18 per cent in 2005. They were clever then but the two and three-year deals are running out now.

Nowadays the average is around 6.05 per cent, according to MoneyExpert.com, for a three-year fixed rate which means you face a £68 a month rise on a £150,000 loan if you’re coming off the average rates for 2004 and 2005.

Even worse if you don’t get a new deal you could be stuck on the standard variable rate of 7.5 per cent and that would really be worse than a wet summer.

Experts say borrowers whose deals still have several months to run can book fixed-rate deals now to avoid further rate rises. Many lenders leave the mortgage offer open for at least three months with some allowing you six months to decide whether to sign up.

There basically is no excuse for being on a standard variable rate mortgage and everyone with them should at the very least have a look at what else is on offer.

Sort your mortgage and you could be around £600 to £700 a year better off depending on the deal you do.

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Borrow cleverly

If you can afford not to borrow then good for you but if you are borrowing then do it sensibly. People looking to borrow less than £5,000 are finding affordable loans increasingly difficult to come by, according to MoneyExpert.com. Average rates for personal loans of less than £5,000 have increased dramatically in the past six months while rates for £5,000 or more have fallen or barely moved.

MoneyExpert.com analysis* shows that average rates on loan values under £5,000 have increased in real terms by around 1.4 per cent in just six months.

The average APR of a £1,000 loan has increased from 14.63 per cent in November 2006 to 16.1 per cent now. A typical £2,500 loan used to cost on average 14.13 per cent but now costs around 15.41 per cent, and rates on a £3,000 advance have risen from 12.35 per cent to 13.8 per cent.

Rates above £5,000 have decreased so if you are borrowing take as much cash as possible and focus on clearing your debt.

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Play your cards right

Average credit card rates are 16 per cent if you’re not on a special deal. That’s nearly THREE times the Bank of England rate.

So look for a zero per cent deal to ease your borrowing pain. And look forward to a relaxing summer.

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