Make One Change in 2014 That’ll Make You Richer

Written by Karen Bryan

£1 coin stack3What one thing could do in 2014 to have a positive impact on your finances? Below are some suggestions to make you richer.

Pay off your credit card bill in full every month

With interest rates of up to 30%, paying off your balance, or doing a balance transfer to a 0% rate card, could save you a fortune in interest. However there will be a transfer fee, usually around 3%. I’d recommend that you build up a fund to pay off that balance at the end of the 0% interest period.

Think twice before making any purchases

You see something you’d like to buy in a store or online – but don’t buy it straight away. Stop and think. Ask yourself: do you need this, is it really such a bargain?

Subscribe to the My Money Podcast from Help Me To Save in itunes

Increase your monthly mortgage payments

This could save you thousands of pounds in interest payments over the life of your mortgage, but do check if there are no overpayment penalties on your mortgage first. This is pertinent during these times of low interest rates, as it’s likely that rates of interest on mortgages will increase within a couple of years.

Start paying, or increase your current payments, into your pension

This is especially true if your employer offers a defined benefit pension scheme, e.g. based on your contributions, salary and years of service. Be aware that there are no guarantees of the value of a defined contribution personal pension scheme (which is based on stock market values) and of the cumulative effect of annual management charges on the value of your pension pot.

Ask for a pay rise or find a new job

Earning more, as long as you spend the same amount, is a surefire way to be better off. Approach your boss with justification of why you deserve to be paid more and/or start looking for a new, better paid job.

Get onto the housing ladder

I don’t say this in anticipation of the currently increasing property prices, but to give you a lower cost base once your mortgage is paid off. For example, your income will drop in retirement, if you still have to pay rent, you could be struggling. So start saving for that deposit now.

Open a Cash or Stocks & Shares ISA

If you have savings, then put them into tax-free ISA account. If you choose a Cash ISA, be prepared to keep transferring it to get the highest rate of interest possible. Watch out for charges on Stocks & Shares ISAs.