Payment protection insurance
It can be difficult to keep track of your finances but this is necessary if you want to stay on top of things and make sure that you do not always go into the red.
It is always wise to try to pay off any loans you have before attempting to save any money, especially if the loan attracts a high amount of interest. Thus, you are moving along the path to being debt free.
If you have any payment protection insurance on these loans then you can claim them back by making ppi claims.
Once you have paid off any loans that are outstanding you can then think about saving money. There are many options available to you here. The best option depends on where you are comfortable putting your money and how much risk you are prepared to take. For the average person, this probably means putting the savings into a bank account because this is one of the least riskiest places to keep your money.
Choosing the right bank account is a matter of doing a lot of research to find the best account package for your circumstances. The most important thing to look for is the return – how much is the bank prepared to pay you in interest for the amount of money you are willing to set aside? Are you going to make one lump sum payment or are you going to set aside a regular amount each month?
How much you save depends on your budget. You can easily save money on utility bills and grab some bargains in the supermarkets to cut down on your monthly expenditure. This will give you greater scope to put more money away for a rainy day. It is important to draw up a budget so that you are aware of how you spend your money and how much you spend each month. You should also budget for things that happen once a year – for example car MOT, Christmas, birthdays and divide the total amount you spend on each by twelve so that you have enough set aside for these one off events.
Once you are debt free and you have worked out your budget you should now be in a position to determine how much you are going to save each month. Don’t forget to claim back mis sold ppi first.