Evaluate Your Financial Products

The financial market is extremely competitive; mortgage lenders, banks and credit card companies are all trying to offer the best rates, so you’re put into a situation where everyone is trying to compete against one another by attempting to the offer the most mouth-watering deals. That makes the financial market extremely dynamic; everyone is trying to close a deal, meaning some companies will drop rates lower than others to get the custom. As a consumer, it’s our job to take advantage of the best deals. As a New Year’s resolution i’m going evaluate all the financial products I am currently using in attempt to save some precious pennies.

The products I will be evaluating are:

• Credit Cards
• Bank Account- Current account
• Mortgage
• Home Insurance
• Mobile Contract

Why evaluate financial products?

WHY? To save money, of course. We’re going to get ripped off by lenders regardless, but we can try and make ‘the Baba treatment’ as painless as possible.
Someone out there is always going to be offering a better deal in EVERY financial field, especially at the beginning of a new year. Traditionally, the housing market goes through a slump through the festive period of Christmas and New Years. It’s expected and understandable; not many people want to shop around for houses during Christmas, do they? However, after the festive period is over it’s back into full swing and lenders want to revive the market by offering great new deals to kick start the year with a healthy batch of new clients. Of course, it’s not just at the beginning of the year new where new and better deals surface, it’s all year round, so you can evaluate your financial products at any given time.

Fix your naive mistakes

When I applied for my first mortgage, I didn’t really understand what I was getting myself into. I didn’t understand how important and significant interest rates were, nor did I understand the difference between variable and fixed rates. Those elements alone are the bread and butter of mortgages; not understanding them is like playing football without knowing what a football looks like. Consequently, I now know I didn’t get the best mortgage policy I could have, I merely got the mortgage policy that my mortgage broker recommended. In hindsight, I was an idiot when I signed up for my first mortgage policy. But that’s hindsight for you. Now i’m wiser and more experienced, I’m able to pin-point where I made my mistake. By changing my mortgage policy to a more financially effective plan, i’ll be able to fix my naive mistake. I think a lot of people suffer because of naivety; fortunately it’s not too late to make amends.

By taking advantage of a better deal on the market, you can save yourself a pretty little fortune, so imagine how much you could save by changing a few of them if not all of them. It’s a nice image, right?

The problem is that a lot of people sign up for a financial product and blissfully use the service until the expiry date, and that’s usually due to convenience. Getting stuck in that kind of comfort zone can be expensive. Reality is that good deals can become bad deals as the market changes, so it’s important to make evaluations of all financial products every once in a while. You don’t even have to do it once a year, even once every few years is ample, just as long as you do it.

Personal changes I’m going to make:

Credit Card
I’m not a fan of credit cards, but I have one for internet purchases. They’re a lot more secure than using debit cards and such. Next month my card actually expires from it’s interest free period, consequently if I buy anything using the card from next month, I will have to pay a 10% interest fee on every purchase. At the moment I’m reaping the rewards of an interest free period. I’m going to cancel the card and apply for a new interest free card- I don’t plan on paying interest on credit card purchases. I mean, what’s the point?

Mortgage
I have the opportunity to remortgage in 5 months time. I’m not actually happy with my current mortgage lender because they’re not dropping their interest rates inline with the Bank Of England. Since that’s the case, I’m sure I can find a better deal another lender and potentially save thousands. Here’s more on The Importance Of Remortgaging.

Home Insurance
Currently, with one of my properties I’m paying £18 per month for home insurance with Zurich. On another property i’m paying just under £90 with Halifax Home Insurance for the year. It’s exactly the same cover, but I’m paying more with Zurich. I’m going to cancel the Zurich Home Insurance and move over to Halifax. I’ll be saving £126 per year. That’s significant amount since it only costs £90 to get insurance with another company. Over 25years (the length of an average mortgage) i’ll save approximately £3150 by switching. Cha-ching.

Mobile Phone Contract
It’s not exactly property related, but it is all relative, since the aim of the game is to save those pennies. The mobile phone industry is ridiculously competitive. I kept a Three salesperson on the phone for over an hour, in attempt to haggle for the best possible deal. As a result, I managed to shave £10 off of my monthly tariff, get a new handset, get longer free calling time and more free texts, and I didn’t have to pay anything extra. It’s always worth haggling for a better mobile contract when it’s time for an upgrade, especially if you’ve been a loyal customer.

So those are all the products i’ll be changing, and in doing so I should be saving quite a bit. Once i’ve transferred all my accounts i’ll be able to tell you how much i’ll be saving exactly. But I imagine it will be with in the thousands, especially if I get a better mortgage plan.

So my advice for the new year is to evaluate your financial products and get the best out of the current market. Don’t be lazy, you only need to do this at least once a year- that’s hardly taxing work.

Does anyone else plan on changing any financial products this year? If so, please let me know about it, i’d love to hear your plans…

May I take this opportunity to wish everyone a great new year!

Attention! If you're new here, you may want to subscribe to my RSS feed so you're notified of all new blog entries.

What To Do Next?

Leave A Comment On This Article Send Article To Friend Email Me (the admin)

Printable Version Suscribe To My RSS Feed Digg it