- Find a higher paying savings account
- Cut your gas and electricity bills
- Tax-free savings
Natalie McGurk, 27, was one of the hundreds of people who contacted us requesting a financial makeover. She and her boyfriend, Alex Simpson, 29, know only too well how redundancy can wreak havoc on your finances.
The couple, from Manchester, moved into a rented two-bedroom house in November and were earning enough to cover all their outgoings. However, in December Alex lost his job in a warehouse that stored goods for Woolworths and he and Natalie are now trying desperately to keep themselves above water and not be drawn into a spiral of debt.
Natalie, a customer service adviser for Royal Mail said: "Alex's redundancy came as a complete shock - he was given less than an hour's notice. And now we're really struggling - there are no jobs out there for him and he doesn't qualify for job seeker's allowance because of my salary but I don't earn enough to cover everything so we're looking for ways to save money.
"We've really cut back on spending - we don't go out anymore and we're careful about what we spend but I'm still going to have to start using the credit card to pay for things as we just don't have enough coming in."
We took a look at Natalie and Alex's finances to see if they could make any savings by changing products and providers and they could potentially save around £100 a month by making some simple changes.
Credit cards - potential saving: £211.52
Natalie and Alex don't have huge debts but they owe a fair amount on credit and store cards but with their borrowing requirements likely to increase in the short term at least, they should look to transfer their existing debts onto a cheaper card.
Until Alex lost his job, Natalie always used to clear her credit card bill in full each month, but she can no longer afford to do that. She currently owes £250 on her Lloyds TSB Duo card, the interest rate on which is 15.9%. She also owes £650 on an Argos store card and £600 on a Littlewoods catalogue account. The annual interest rates on these are 27.9% and 29.9% respectively.
If Natalie transferred all of these balances to a Halifax All In One card she would benefit from a nine-month interest-free period. She would be charged a 3% transfer fee but this is well worth paying as she would save £211.52 in interest during the nine-month interest free period.
Purchases are also interest-free for the first nine-months which will help if Natalie and Alex have to use the credit card more often now Alex is out of work. However, they should try and repay as much as possible each month and they need to be aware that the interest rate will jump to 15.9% when the 0% deal comes to an end.
Natalie should also check her credit rating before applying for a new credit card as there is no point in applying for a card she won't qualify for - the leading deals are only available to those with good credit histories. Her credit score should be ok although she was late making one credit card payment last November.
The Smart Search tool on our credit card channel can help identify which deals you are likely to qualify for.
Switch current accounts - potential saving: £144.40
Natalie's current account is with Lloyds TSB - she earns just 0.1% on balances in credit and is charged 19.3% when she is overdrawn. Her overdraft limit is currently £250 but now Alex has lost his job she is likely to need to increase this. She should therefore look for a bank account with a more competitive overdraft offering.
Alliance & Leicester's (A&L) Premier Account offers an interest-free overdraft for the first 12-months up to a maximum of £2,000. The account pays 1% on the first £2,500 held in credit.
A holiday may not be possible this year, but Natalie would also get a free European multi-trip travel insurance policy which would mean she wouldn't need to buy cover separately if she was to go away.
A&L is also offering a £100 switching incentive to new customers who open a Premier Account - Natalie could therefore be £144.40 a year better off if she switched her current account from Lloyds to A&L.
Unfortunately Alex wouldn't qualify for this deal at the moment because A&L requires you to deposit at least £500 a month into the account but because he's lost his job this may not be possible.
He may therefore be better off sticking with his current bank, Barclays for the time being. As soon as he gets a new job though, he too should look to change his current account as Barclays pays no interest on balances in credit, while its authorised overdraft rate is 17.9%.
Home insurance - potential saving: £130.80
Natalie and Alex had just taken out a contents insurance policy with Lloyds TSB and were just about to come out of their 'cooling off' period until a search on moneysupermarket.com got them a better deal with Birmingham Midshires. Their monthly premiums were virtually halved from £21 to £10.10 - saving them a significant £130.80 over the year.
Broadband, TV and phone - potential saving: £150
The couple currently pay BT for their landline - they are on Option 1 which doesn't include any free calls. Their monthly bill comes to around £20. They also have a Sky television package which costs £42 a month - as well as Sky Sports and Movies their deal also includes free broadband.
If they dropped either Sky Movies from their current package and swapped their phone from BT to Sky Freetime, which includes free evening and weekend calls to other UK landlines at any time, they could save £150 a year.
Gas and electricity - potential saving: £515.36
Natalie and Alex currently have pre-payment meters for their gas and electricity. They pay around £20 a week for gas and £10 a week for electricity. Pre-payment meters are the most expensive way of paying for energy and therefore the potential savings are significant. However, because they live in a rented house, Natalie and Alex will need to get the permission of their landlord to have new meters installed.
If they are able to switch, the couple could save an estimated £515.36 a year by moving on to EDF Energy's Online Energy v6 tariff for both gas and electricity and paying by monthly direct debit.
