Cut it out...

SIMPLE WAYS TO BREAK YOUR BAD HABITS

MANY of us will feel our finances are spiralling out of control right now as prices and taxes skyrocket.

There is not much we can do about soaring home energy and food costs, or the upcoming National Insurance and council tax price hikes.

They’re driven by global economic forces and political whims out of our control.

But one thing we can take charge of is bad financial habits developed over the years that we can no longer afford.

Squandering money on unused subscriptions, pricey credit cards and overcharging insurers are just some of the ways we blow more money than we should.

They could be costing us £250 a month – which adds up to £3,000 a year, according to new research from low-cost financial advice provider OpenMoney.

Financial adviser Hayley Millhouse says this is not just bad for our pockets, it can also damage our mental health: “Two thirds say they experience stress and anxiety due to their bad money habits.”

Here are our 10 worst habits, and how to break them.

1

Paying for unused subscriptions

Companies love selling subscriptions. It gives them a regular stream of income, which often continues after customers have stopped using their services. We forget, they profit. Another bad habit is forgetting to cancel free trials. Hayley says: “These are now our most common bad habits, but they are also the easiest to fix.”

Check your bank account for subscriptions and see which are really worth the money.

“Some free trials let you cancel at any time during the free period, while still keeping the service for the allotted amount of time.

“To avoid costly memory slips, you could even cancel on the day you sign up.”

2

Credit card nightmares

Spending money on plastic seems free and easy, until you cannot pay your monthly bill.

Then you will find yourself paying APRs of around 22.7%.

If you are struggling with payments, switch yours to a zero interest balance transfer card such as Sainsbury’s Bank’s 21-month no balance transfer free credit card, and pay it down in the intro period.

Hayley warns: “Other finance options such as Buy Now Pay Later are leading more into debt.”

3

Failing to switch suppliers

Too many of us fail to move on from an overcharging energy firm, motor and home insurer, broadband supplier, mobile operator or mortgage lender. And we pay dearly as a result.

“Always look elsewhere before your contract renews. This can save hundreds of pounds each year,” says Hayley.

4 Contactless payments

Contactless cards are so easy to use. Perhaps a little too easy, as “tap happy” consumers use them without even thinking about the effect on their finances.

More than half of us say moving away from physical cash increases the risk of getting into debt, research by personal finance firm NerdWallet shows. Alexandra Price, director of financial planning at investment specialist Charles Stanley, says: “It’s easy to overspend on contactless cards, so use cash and check your statements.”

5

Failing to budget

This is another bad habit we need to ditch. Hayley says set your budget and stick to it: “Note your monthly outgoings and what you have left over to create a monthly spending and saving plan.”

6

Not reviewing direct debits

Paying bills through direct debit is another quick and simple option that can prove expensive if you fail to keep tabs on what’s going out of your bank account each month. Check them regularly.

7

Expensive holidays

The nation needs a holiday right now so it is hard to discourage people from taking trips and breaks at the moment.

Just make sure you don’t relax the purse strings too much.

8

Gambling and betting

Gambling and betting are among the worst and most dangerous money habits we can develop – and need to be given careful consideration. Hayley says: “Placing the odd bet may seem a bit of fun, but remember that you will rarely win.”

Stick to betting small amounts and ensure your essential payments such as rent, mortgage, energy bills and grocery bills are all covered first.

“Never bet money you can’t afford to lose – and if you worry your habit may be getting out of control, contact a gambling charity,” she adds.

Finance options such as Buy now Pay Later are leading more into debt

9

Not reading bills

There is only one thing worse than reading bills – and that’s not reading them and finding later you do not have the money to pay them. You could end up paying fines and penalty charges, and damaging your credit score too.

10

Opting out of a workplace pension

The workplace auto-enrolment scheme introduced in 2012 has given 10 million mainly lower paid workers a company pension for the first time.

You get employer contributions and tax relief – so if you opt out you are turning down free money.

Finally, you may have some other bad money habits not listed here in our top 10.

“But whatever they are, it is never too late to manage your money better,” says Hayley.

The maker of fizzy drink Irn Bru said it had put up prices to offset rising costs. It came as AG Barr said annual profit would top forecasts, with sales in the year to January up 17.5% to around £267million.