There are many ways to ease the financial pain

by Iain Laing, The Journal
As more big name store chains disappear from our high streets it seems the economy is showing little sign of revival. But ALOK DHANDA explains why we should be thinking positively
IT’S been another week of doom and gloom in the headlines, with big high-street names like Jane Norman, Habitat and Carpetright being badly hit by the ongoing lack of consumer confidence. UK retail sales fell 1.4% in May and the outlook looks far from rosy in the coming months.
When it comes to your own financial matters though, don’t let the negative press affect your mindset – the key is to stay positive. If you’re facing financial difficulties, don’t bury your head in the sand. You should seek financial advice as soon as you can, before things spiral out of control.
For many of us, the problem is that we spend more than we earn. By relying on overdrafts, loans and credit cards, we have created a lifestyle for ourselves and our families that we simply cannot afford. Realising that this is a problem is an important step in addressing our financial difficulties, or indeed, preventing any from happening in the future.
Start by drawing up a personal budget to assess your income and outgoings each month. This helps you to plan your spending more effectively. Alternatively, why not keep a diary of your spending habits. This will highlight where your disposable cash goes every month and it will also help you to identify where savings could be made.
It’s not just about number crunching though – you need to change your attitude towards money too. If you rely on your overdraft facility or credit card to help pay for your purchases on a month-by-month basis, then you need to scrutinise your lifestyle more closely. For example, if you buy lunch every day and spend around £3.50 each time, you’ll end up spending over £870 a year just on lunch. Make your lunch instead, it’s far cheaper.
Try to save money where you can and every time you pull out your purse or wallet, consider whether you really do need to buy a particular item.

There are lots of other ways to save, and make, money. Clear out your wardrobes and take a look in the attic for unused items, then hold a car boot sale or sell items on eBay to make some extra cash. Get creative with your money-making tactics and supplement your income by tutoring or let out one of your rooms – financial support is available via the Rent a Room scheme.
Simple changes to your daily routine, such as making a shopping list before venturing to the supermarket and then sticking to it, or taking up a free hobby that prevents you from spending money elsewhere, are easy to adopt.
Other useful tips include carrying just cash in your purse or wallet and leaving the credit cards at home. Or why not sleep on it before making a purchase. Chances are, you’ll realise that you don’t need to part with your cash after all, or you might find the item cheaper elsewhere.
As well as tackling your personal spending habits, you should also take a look at regular outgoings like insurance, gas and electricity. Shop around for the cheapest utility supplier in your area by taking a look at websites like www.uswitch.com and make sure you get the best deals for home, car and travel insurance by visiting price comparison websites like www.gocompare.com and www.moneysupermarket.com.
For those with mounting credit card debt, look out for 0% balance transfer offers which will give you the opportunity to clear off some of the balance, as opposed to covering just the interest charges every month.
The extra pounds you save from making these changes could then be put to use in areas of essential financial protection such as a life policy, a critical illness policy, or to top up your pension. Make sure you review all your policies regularly and make an appointment with your independent financial adviser.
An IFA can offer financial help for your business as well as your personal life, and can help you to assess all your options. For example, you might be able to free up equity in your home or access a policy you took out some years ago to help ease the current financial strain.
If on the other hand, you’re fortunate enough not to be experiencing problems with your money at the moment, don’t be complacent. You have to plan for the unexpected and advice can help you to prepare for all eventualities, as well as achieve your financial goals and protect your assets.
Remember that whatever your circumstances, options are available to improve your finances in both the short and long term.
Alok Dhanda runs Dhanda Financial, 52 Dean Street, Newcastle upon Tyne, NE1 1PG. Telephone 0191 255 8960, email alok@dhandafinancial.com or visit www.dhandafinancial.com.
Source http://www.nebusiness.co.uk/