My Top Three Financial Tips

Donna Werbner reveals her top three tips to get into better financial shape - and fulfil any financial goal.

Don't put off until tomorrow what you can do today.

I don't normally start my articles by ordering Fools around. But then again, these are not exactly `normal' times.

According to a survey of 2,003 UK adults, commissioned by CreditExpert, 75% of people are planning to put key life plans - such as changing jobs or relocating - on hold next year, due to the economic downturn.

Money worries are apparently so great that the survey found one in every five 25-34 year-olds is putting off having a baby. And one in every ten is postponing setting a wedding date. (Others, ironically, reported they are putting off getting a divorce.)

Well, I say: enough worrying! Start doing something about it!

Yes, we may be suffering from so-called "depression economics" - but that doesn't mean life has to be depressing. If you want to achieve a "key life plan" next year, I say: don't let the recession put you off.

Whatever your goal, you should be able to at least make a start, no matter how small, that will put you on the right track for the future. Because when it comes to your finances, the best time to take action is always now. Not next year. Not tomorrow. Today!

Credit card debt

There's nothing that will hold you back more in life and stop you from fulfilling your goals like debt will. And one of the heaviest, manacling forms of debt is credit card debt.

This is because credit cards carry much higher interest rates than mortgages and loans, but the monthly minimum repayments are extremely low (typically just 3%), meaning even a relatively small debt can take years to pay off .

So whatever your ultimate financial goal, look at clearing your credit card debt as soon as possible.

One of the easiest ways to do this is to switch to 0% on balance transfers credit card, such as the market-leading Virgin Money Mastercard. With this card, you won't pay any interest on your existing balance for 16 months.

In other words, every penny of your payments for the next 16 months will go towards clearing your debt - instead of the vast majority of the money you pay going towards paying off the interest.

Just be careful you don't make any purchases on this card, or you'll end up paying 16.6% on this extra debt. And remember to switch to another 0% card if you haven't paid off all your debt, in 16 months' time!

Saving, not spending

Whatever your top financial goal, it's good to get into the habit of saving, not spending.

One of the best ways to do this is to use a statement of affairs calculator to figure out exactly how much money you've got going in and out of your bank account every month.

It may also help you to keep a `spending diary' for a week (or a month if you can manage it). That way, you can keep track of everything you spend. (If you've got the internet on your mobile phone, you can download this free `spendometer' from  debt charity Credit Action to keep track of your spending on the move.)

Having this information really is half the battle to spending less and saving more. Because if you know what you're spending your money on, you'll be in a much better position to figure out:

a)      What you should cut back on

b)      What you're paying too much for

No one finds it easy to make a) cut backs. But b) is much easier to work out - and fun, too. Because there's nothing quite as satisfying as simply finding a way to pay less for the same service.

So make sure you review all your bills periodically (starting today, of course). Are you on the best mobile phone tariff for your needs? Can you switch and save on your energy bills? Is it possible to get a cheaper broadband package?

Set yourself a challenge: how much can you save in an hour of shopping around? You might be surprised at just how easy it is.

Make the most of your money

To put yourself in a good position to fulfil your financial goals, you need to make the most of the money you have (and spend).

So, for example, if you have savings, you should make sure you're using up your full Cash ISA allowance, currently £3,600.

Similarly, if you like shopping online, you should use a cashback site to get cash back on the purchases you make, and look for discount vouchers too on forums like hotukdeals.com.

Finally, make the internet your friend. Use shop-bots like Pricerunner and Kelkoo to compare prices on goods, so you always pay the cheapest price, and mysupermarket.com to compare prices (and calories) of items across different supermarkets.

Hopefully, by taking these steps, you'll whip yourself into a much better financial shape than you were when you started reading this article. And once you're financially fit and healthy, you'll be much better placed to fight back against the recession and achieve your number one financial goal.

Just please, please, please don't put it off..

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