Don't let low interest rates put you off being a regular saver. Whether it's a rainy day account or some cash to help towards the cost of Christmas, many of us strive to put a little money aside.
Even though the rates aren't particularly attractive at present, saving money on a regular basis is always a smart move.
The hardest part of saving for most people is actually getting started. We may have good intentions of setting aside some money at the end of the month, but by the time we get there it's been spent.
A good solution is to set up a standing order so that your money is switched to your savings account the day after you get paid – it won't be sitting around account tempting you to spend it.
Many banks and building societies offer regular savings accounts and although the interest rates are often three or four times higher than standard savings products, the rules are pretty strict.
Most regular saver accounts don't allow any withdrawals during the 12-month term of the account and you must also make a payment every month to qualify for the headline interest rate. Although these terms and conditions may seem a little off-putting, for some people it helps instil financial discipline.
If you've got a current account with First Direct or M&S Bank you are eligible for a regular saver account paying 6 per cent AER, while HSBC offers the same rate for its Premier and Advance customers (and 4 per cent to bank account holders). Other regular saver deals where you don't need a current account to qualify include Kent Reliance (branch only) paying 4 per cent AER, and Leeds Building Society (available online) paying 3.05 per cent.
Once you get into the habit and have built a savings pot, it opens up more savings options – perhaps putting your lump sum into a fixed-rate ISA while you take out a new regular saver for the following year.
Don't end up falling foul of insurance exclusions
Just because you've purchased insurance cover, don't assume that you'll automatically be covered if something goes awry.
For example with your car insurance, be careful not to underestimate your annual mileage calculation, because if you claim to be driving 10,000 miles each year yet in reality are driving twice that distance, don't be surprised if the insurer throws out any claim you may make.
Similarly, when applying for home cover, in many instances you must state whether the locks on your front and rear doors comply with "British safety standard BS3621". Not surprisingly, as in some cases you'd need to remove the lock out of the door to check, the question is often answered incorrectly. However, it could prove an expensive mistake if you suffer a break in and it is subsequently found that the lock does not match the details on your policy, as your insurer may reduce or refuse a pay-out.
Another important tip is to ensure you always report a theft to the police within 24 hours of the incident. Insurers will ask you for a crime number as part of the claim process. Failure to obtain a number could cast doubt on whether a theft has genuinely taken place, and could result in a claim being rejected.
The annual premium is the key factor for most people when they receive their insurance renewal, but a read- through of the individual cover and exclusions is equally important if you want to avoid any nasty surprises.
Andrew Hagger is an independent personal finance analyst from www.moneycomms.co.ukReuse content