Kick all the bad habits in fight against rising costs

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, as these are driven by global economic forces and political whims.

But one thing we can take charge of is our own behaviour.too many of us have developed bad financial habits 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 spend more money than we should.

Our bad habits 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 said 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, Millhouse said: “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, whilst 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 CARDS

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 per cent. If struggling, 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.

Millhouse cautioned: “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 pay dearly as a result. “Always look elsewhere before your contract renews.this can save hundreds of pounds each year,” Millhouse said.

4. CONTACTLESS PAYMENTS

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

More than half of us say moving away from physical cash increases the risk of getting into debt, research from Nerdwallet shows.alexandra Price, director of financial planning at Charles Stanley, said: “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. Millhouse said set your budget and stick to it: “Note down your monthly outgoings and how much 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

Frankly, the nation needs a holiday right now, as does the tourist industry, so it is hard to discourage people from taking trips and breaks at the moment. Just don’t relax the purse strings too much.

‘Note down your monthly outgoings and how much you have left over

to create a spending plan’

8. GAMBLING AND BETTING

Gambling and betting are among the worst money habits, Millhouse said. “Placing the odd bet may seem fun, but remember you will rarely win.” Stick to 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 added.

9. NOT READING BILLS

There is only one thing worse than reading bills.that’s not reading them and finding later that you do not have the money to pay for them.

You could end up paying fines and penalty charges, and damaging your credit score too.

10. FAILING TO PAY INTO A WORKPLACE PENSION

The workplace auto-enrolment scheme has given 10 million mostly lower paid workers a company pension for the first time.you get employer contributions and tax relief, so by opting out you are turning down free money.

You may have bad money habits not listed here. “Whatever they are, it is never too late to manage your money better,” Millhouse said.