Currently, interest rates are low but inflation is high.  As of next year, a lot of people are going to find themselves paying more money to the government if only in additional National Insurance contributions.  This means that everybody should be thinking seriously about increases to the cost of living and preparing accordingly.

Can you increase your income?

Before looking to see if there is any way you could save money, try considering whether there is any way you could make money.  Selling unwanted possessions can be an excellent idea but it will only bring you a one-off benefit.  This can certainly be worth having.  It is, however, even better if you can have extra income, preferably consistent extra income.

If you’re in employment, can you get a higher-paying job or negotiate more money for your current role?  If you’re self-employed, are you really making the most of your earnings potential?  It might help to speak to a coach/mentor for a second opinion on this.  Either way, could you start a side-hustle and or monetize assets like a spare room?  Could you create a spare room, for example by getting children to share?

Also, make sure you keep an eye on your entitlement to benefits and, if relevant, make sure you claim them.  Odd as it may seem, it may be worth claiming a benefit even if you don’t get any cash or only a very small amount.  It may entitle you to other benefits.  For example, some benefits qualify you for National Insurance contributions.  These could be useful in the future.

Can you get a better deal on your mortgage?

If you have a mortgage, then this is probably your single, biggest personal loan.  The interest rate may be lower than many other loan products, for example, credit cards.  The amount borrowed, however, will usually be substantially higher.  As a result, both the finance cost and the monthly repayment can be significantly more.

Getting the best mortgage deal available to you can therefore make a real difference to your finances.  There are generally two parts to making this happen.  Firstly, you need to do everything possible to make yourself an attractive mortgage candidate.  Secondly, you need to make sure that you actually do apply for the right mortgage.

The key to making yourself an attractive mortgage candidate is to see the situation from a lender’s perspective.  Essentially a lender wants evidence that you both can and will repay the loan.  With that in mind, polish your credit record and think about the sort of message your financial statements make about you.  For example, do they show steady employment/earnings and prudent financial management?

The key to applying for the right mortgage is to do your research or have a professional (mortgage broker) do it for you.  Remember, that the lenders with the biggest marketing budgets do not necessarily offer the best deals.  Also, remember that not all lenders work with comparison sites.  Finally, remember that you only get a new mortgage if you make the time to apply for one.

Can you improve your general finances?

Your mortgage may be your single, biggest expense but it’s unlikely to be your only one.  If you have any other debts, then make it a priority either to pay them off quickly or to make sure that you’re on the best possible deal.

After this look at what expenses make the biggest difference to your finances and, again, check that you are on the best possible deal.  With that said, you may want to be careful about changing energy suppliers.  If your current supplier appears to be reliable, you might want to stick with what you know rather than change.

Finally, make sure to keep an eye on your small expenses.  See if there are any you can eliminate now or could potentially eliminate in future if the need arises.  Small savings really can add up.

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