Newspaper article Evening Chronicle (Newcastle, England)

Are You Guilty of My 5 FINANCIAL ? MONEYSAVING EXPERT MARTIN LEWIS POINTS OUT THE MOST COMMON MISTAKES THAT END UP COSTING US DEARLY

Newspaper article Evening Chronicle (Newcastle, England)

Are You Guilty of My 5 FINANCIAL ? MONEYSAVING EXPERT MARTIN LEWIS POINTS OUT THE MOST COMMON MISTAKES THAT END UP COSTING US DEARLY

Article excerpt

Byline: Martin Lewis

RE you a sinner? Financially that is.

AThere are a host of everyday money misdemeanours that millions of people commit, costing them thousands, without being aware of it.

So having recently toured around the UK doing roadshows for the upcoming sixth series of my ITV show (back 8pm Tuesday, November 22 - well it's always worth a plug), I've collated five of the most common.

1 SAVING WHILE YOU'VE EXPENSIVE DEBTS SAVINGS rates are depressingly low - the top easy-access rate is 1%. Credit card and other interest rates are depressingly high. So a PS1,000 credit card debt at 18% costs you PS180 a year, the same amount saved in top paying savings account at 1% interest only earns you PS10. If you had both, pay the debt off with your savings and you'd be PS170 a year better off.

You may be thinking, "but I want to keep my savings, what if the boiler packs up?" However, that's not a logical strategy. Let's carry on the PS1,000 debt and PS1,000 savings scenario... | If you don't pay the debt off with the savings and an emergency happens that costs you PS1,000 to fix, you'd use all your savings and still have PS1,000 of credit card debt.

| If you do pay off the debt with the savings, and a PS1,000 emergency happens, you'd need to pay for it on your credit card, meaning you still have no savings and PS1,000 of credit card debt.

The end result of them both is the same, yet pay off the debt with the savings and you save in the meantime.

2 NOT ASKING YOUR ENERGY FIRM ARE YOU ON ITS CHEAPEST DEAL MOST people in the UK are on their energy firm's standard tariff, which typically means they're overpaying by PS300 per year. I've talked about switching until I'm blue in the face, and, of course, the best plan is take five minutes to do a full market comparison via my www.CheapEnergyClub.com or any www.Ofgem.

gov.uk approved comparison site.

Yet for some that doesn't hit home.

So even if you won't do that, just pick up the phone and ask your current provider "Am I on your cheapest tariff?" and, if not, switch to that as there's no change but the price.

For example, British Gas's standard tariff with typical use is PS1,044/year, but it also runs Sainsbury Energy (ie, it's the same company but a different name), and its cheapest fix is PS804/ year - saving PS240/year.

3 ONLY MAKING THE MINIMUM REPAYMENTS ON CREDIT CARDS CREDIT card minimum payments are based mostly on a percentage of the balance, which only just covers the interest.

A 30-year-old with PS3,000 debt on a credit card at 17.9% interest, who made only typical minimum repayments, would take 27 years to clear it.... By then, they'd be 57 and have paid a total cost PS4,000 in interest (try my minimum repayment calc at www.mse.me/minrepay).

Now you may be thinking 'easy to say, but I can't afford more than the min. …

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