NOT keeping on top of our financial admin is costing us millions a year – while being big business for firms who rely on us being forgetful.
Accidentally taking out paid-for subscriptions and letting our utility and other bills auto-renew are two key reasons for losing out.
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Finance expert Martyn James says many people find tackling their finances frightening and overwhelming – especially if they have put it off over a period of time – meaning they’re even more out of pocket.
It can also be hard to spot hidden payments coming out of a bank account or our phone bills.
Lifestyle coach Camilla Collins, 36, from Bath, has been paying up to £7.99 a month for an Audible subscription for more than two years – without even using the service.
The fee began after the end of a free Audible trial that was included in a Sim-only O2 deal she bought for her iPhone in December 2021.
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Entrepreneur Camilla, who runs the hair and make-up agency CJC, said: “I perhaps did listen to some audiobooks right at the beginning but I can’t really remember.
“It was my fault really as I didn’t think to check my phone bill for add-ons like that.
“I’ve been struggling to get into my online account and it was only last week when I called O2 I managed to sort out access.
“That was when I saw the Audible charge, and thought what on earth is that? I think my package originally had a free trial for three months.”
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“I’ve now cancelled it and my monthly phone bill has fallen from £25.31 to £17.32, which will save me almost £100 a year.
A spokesman for O2 said the terms and conditions of the package were clear, and that customers are notified before subscription charges are made.
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Here are the strategies for getting on track…
GETTING STARTED
Tackle your finances in 15 to 30 minute bursts, advises James, to make them more manageable.
Martyn added: “My two top tips are to make sure that you have something on in the background, like music, the radio or even the TV, as sitting in silence looking at bank accounts can feel depressing.
“Keep things short and set a timer on your mobile phone to help you focus. More importantly, you’ll know it’ll be over soon.”
Pete Ridley, a finance expert from Car Finance Saver, suggests sitting down once a month to look at what’s coming out of bank and credit card accounts. This could be allocated to, say, the first day, or first Sunday, of the month.
For specific tasks, like sorting your car insurance or doing a tax return, allocate a specific time and date to get it done, says Sarah Coles, expert at investment firm Hargreaves Lansdown.
She added: “It can help if you tell someone else about your deadline.
“Every year I aim to do my tax return early, and I drop it in conversation with everyone I possibly can.
“Then I have to do it, or it will be embarrassing to admit I didn’t get around to it.”
Setting yourself rewards can also help – such as watching the next episode of a TV programme after you’ve got a job done.
SET REMINDERS
If you don’t know where to begin with budgeting, start by writing down your expected incomings and outcomings over the next year.
This should include key upcoming dates for when your utility bills, like your car or home insurance, broadband and energy contracts must be paid.
Set reminders for these deadlines, whether it be in the form of a scheduled email to yourself, note on your wall calendar or diary or a phone alert.
In 2022 the Financial Conduct Authority (FCA) introduced new rules which said insurers cannot charge existing home and car insurance customers more to renew their policy than they would to a new customer wanting an equivalent plan.
But that doesn’t mean you won’t get a cheaper deal by shopping around with other providers.
Drivers could save up to £549 on their car insurance by comparing deals, according to price comparison site Compare The Market.
For energy bills, consider switching to one of the more attractive tariffs on the market, such as Outfox the Market’s v1.0 tariff, which pays 8 per cent less than the price cap, while British Gas’ v2 deal offers 5 per cent less. Both are open to new customers.
CHECKING OUTGOINGS
Checking your regular payments can be more complicated than you might think.
Most will come out of your bank as direct debits, where a company takes a fixed amount of money on a set date, or as standing orders, where you set up fixed payments yourself via your bank.
You should be able to find a list of direct debits and standing orders on your online or mobile banking apps.
You may also be making “recurring payments”, where you give a firm your long bank or credit card number so they can charge you in the future.
Most services, including gyms, breakdown, TV streaming or insurance service, debit for subscriptions in this way, but they won’t show up on your regular payment lists.
How to save on your mobile phone bill
NOT happy with your current mobile phone deal?
If you’re outside the minimum term of your contract then you won’t need to pay a cancellation fee – and you might be able to find a cheaper deal elsewhere.
But don’t just switch contracts because the price is cheaper than what you’re currently paying.
Take a look at how many minutes and texts, as well as how much data you’re using, to find out which deal is best for you.
For example, if you’re a heavy internet user it’s worth finding a deal that accomodates this so you don’t end up spending extra on bundles or add-ons each month.
Also note that if you’re still in your contract period, you might be charged an exit fee.
Ready to look elsewhere? Pay-as-you-go deals are better for people who don’t regularly use their phone, while monthly contracts usually work out cheaper for those who do.
It’s worth using comparison websites, such as MoneySupermarket and uSwitch.com, to compare tarrifs and phone prices.
Billmonitor also matches buyers to the best pay-monthly deal based on their previous three months of bills.
It only works if you’re a customer of EE, O2, Three, Vodafone or Tesco Mobile and you’ll need to log in with your online account details.
There’s also MobilePhoneChecker,which has a bill monitoring feature that recommends a tariff based on your monthly usage.
If you’re happy with your provider then it might be worth using your research to haggle a better deal.
It’s why it’s really important to keep an eye on your bank and credit card transactions.
Also check your Paypal account, mobile phone bill and any online payments services you use, like Apple Pay or Google Pay, as they can appear here.
Check before cancelling any regular payments in case you’re breaching a contract, which could leave you facing penalty fees.
BEWARE OF FREE TRIALS
More than 13million people have accidentally taken out a subscription in the last 12 months for £688million of services such as fitness apps, food delivery and repeat pet services, according to the charity Citizens Advice.
Of those who ended up with an accidental subscription the most common reason was because it auto-renewed without their knowledge, followed by people taking out a free trial but forgetting to cancel later.
Almost one in four with an accidental subscription thought they were making a one-off purchase.
Morgan Wild, director of policy of Citizens Advice, said: “With budgets increasingly squeezed, it’s vital we all feel in control of our spending. It’s unacceptable for companies to rely on people forgetting to cancel at the end of a free trial. We know this model exploits busy, cash-strapped consumers.”
John Haslam, of Stockport Credit Union, says: “We recommend carefully checking when the first payment of a new subscription will leave your account, and setting a reminder in your phone to cancel the service if you don’t want to continue with it.”
IS IT WORTH IT?
Have an honest family discussion about the value of the subscriptions you’re signed to, advises Peter Ridley, of Car Finance Saver.
Four in five Brits are signed up for at least one subscription service, spending an average £42 a month, according to Finder.com
Some of the biggest are Netflix, costing £4.99 a month with ads, Amazon Prime, £8.99 a month, Spotify Premium, a month £10.99 and YouTube Premium, £12.99 a month.
For Netflix, Disney Plus or Spotify, look at how often you’re actually using these every month. If it’s only once or twice a week, you might be better off pausing, downgrading, or cancelling your subscription until you’re more likely to use it, such as during the summer holidays when the kids are at home.
The same applies to services like gym memberships, the an average cost £40 a month, and meal kit services, which can cost around £2,000 a year for three family meals per week.
Spreadsheets can help you keep track of their value, to find out exactly how much each use is costing you.
For example, if you pay £50 a month for a gym membership but you only go twice a month that means each session costs £25. In this case, you’ll be better off booking one-off classes as and when you want them as they’ll work out much cheaper per session.
AUTOMATIC SAVING
In terms of moving money to savings accounts, whether it be for yourself, your children, or into a pension, don’t rely on yourself to remember to do it.
Coles explains: “I automate all the things I should really do – like regular saving, investment and a pension. That way I only have to get round to doing the right thing once.”
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It’s easy to set up a standing order to move money from your current account to a savings account using online or mobile banking. But if you’re not sure, talk to your bank.
Set up a direct debit payment to clear your credit card balance in full every month – providing that you can pay it back in full.
Money saving challenges
Here’s some of our favourite money saving challenges to h
Here’s a rundown of some of the most popular schemes:
- Weather saving challenge – Save the amount equal to whatever the highest temperature was that week. £1 = 1C.
- 1p challenge – save 1p a day for everyday of the year, but it increase the amount by 1p each day. So day one you save 1p, 2p on day two and 3p on day three. When you reach 100 days you start adding a £1 coin each day too, while this increases to a £2 coin each day plus pennies at 200 days, and £3 each day on top of pennies at day 300.
- 20p a day challenge – Start by putting 20p in savings, then increase the amount by 20p every day. For example, the first week will look like this: 20p, 40p, 60p, 80p, £1, £1.20, £1.40.
- £5 a week challenge – Like the 20p challenge, put aside £5 a week and increase it by a fiver each week. Eg £5, £10, £15, £20
- Round-up challenge – Every time you buy something, round up the purchase to the nearest £1 and put the difference in a savings account. Eg. You pay £2.60, so you put 40p in savings. You can use an app such as Monzo or Starling to do this.
- Bingo challenge – Here you have a bingo card with different numbers on it and you tick them off when you’ve put that amount in your savings account. It can be ad hoc but you have to tick them all off by the end of the month.
- Monday to Sunday challenge – With this challenge, you simply save £1 on Monday, £2 on Tuesday and so on until the weekend where you don’t save on Saturday or Sunday.
- 365 day challenge – Every Sunday you put aside £1, followed by £2 on Monday, £3 on Wednesday and so on. On Saturday you’ll put away £7, and then the process repeats and you’ll put aside £1 on Sunday as the new week begins.
