Your 2011 Survival Guide
Defuse the debt time bomb
The clock is ticking, you have to act fast. already if you can manager your debts now, what happens when interest rates rise? Hunt down every debt, starting with the most expensive first, and dispatch them with extreme prejudice.
Snowballing isn’t a game. Slay that store card. grind your credit card. Take that overdraft down. Then turn your sights on your mortgage, because when interest rates climb it could blow up in your confront. Debt is your biggest enemy – Destroy it now, before it’s too late.
Slash your spending
To survive, sometimes you have to be cruel. So line up your soft little luxuries, and hack them to shreds. Take a knife to your daily cafe latte, after-work pint or regular takeaways.
Next, tackle the essentials. Spending too much on your weekly shop? Website Mysupermarket.co.uk can help you forage for the best deals.
Stalking a bargain? Try Frugal Friday, our weekly round-up of the week’s top bargains. Scavenge by your kitchen cupboards for forgotten tins, jars and packets of chow. Some people could live for weeks on what they find. Or brave the elements and grow your own fruit and veg.
Outwit the taxman
He’s clever, he’s cunning, he’s cruel and he understands the tax game better than you ever will. But that’s no reason to let in defeat, because you have some pretty average weapons at your disposal, such as your tax-efficient ISA allowance.
It’s got quite a kick and, better nevertheless, it automatically reloads every 6 April. You have £7,200 worth of tax-free ammunition this financial year (£10,200 if you’re over 50), and £10,200 next year. If you want more ammo, there’s also pension tax relief. You hate tax so much you can taste it. Use that to your advantage. Lock and load!
Know your enemy
Your bank is not your friend. Your credit card is not your friend. Your overdraft is not your friend (already if it is authorised). Your utility supplier is not your friend. Retail therapy is not your friend. You owe them zero loyalty. Once they have served their purpose, get rid of them.
And watch out for enemies lurking in the bushes. Hide your identity from ID thieves. Evade foreign money thieves. Protect your credit record.
Keep a clear head
Your mobile phone is a functional tool, not a costly symbol of your identity. If you’re selling your house, make sure your estate agent doesn’t rip you off. Don’t pay when you can get stuff for free. Be rational, fight superstition. Feeling cold? Don’t turn up the heating, put on a jumper.
Get some back-up
already the toughest can’t do it all on their own. If you’re up to your neck in debt, there is no shame in calling in free and secret sustain from a specialist such as Citizens Advice, the Consumer Credit Counselling Service or Pay plan. These guys know what they are doing.
But watch out, others will betray you, such as debt advisory sets that charge a fee for setting up a debt management plan or Iva. Stick to those you can trust.
Adapt and survive
OK, so you can’t switch mortgage now, because your loan-to-value is too big. That may change, as lenders ease their criteria. Keep watching, keep waiting, and when you identify a better deal, pounce. Your savings account may have been a killer when you took it out, but today you’re the victim. Turn the tables on your bank by switching to a better deal. Lost your job? So fight back, right here, right now. Spare a thought for the future. If you don’t have any pension, retirement really will be a survival course.