Three tips that will make 2012 a much better year for you

 

Will the world end in 2012? According to some, the fact that the 5,125-year-old Mayan calendar suddenly comes to an end on 21 December 2012 is a sign that it will. My view? There is absolutely no chance of that happening.

So what can we predict for next year with any degree of accuracy? Will the eurozone collapse? Will China's stuttering economy implode? Will Chelsea or Arsenal finally win the Champions League?

Any of the above could happen but may not. Crystal-ball gazing is a waste of time. I know that investors have to take a view of what may happen to companies or markets, but let's be honest, at best, it's well-informed guesswork.

So at a time when many of you may be thinking of New Year resolutions that may improve your finances, I'm going to give you my own top three tips that will definitely make a difference if you follow them next year.

First tip: rip up your credit card – you can live without it. As long as you have a debit card, you have the convenience of plastic. But with one key difference. Every time you spend with a debit card you know the cash is coming out of your bank account (or putting you deeper into the red).

With a credit card it's easy to fall into a mind-set that you can flash the plastic and worry about repaying the cash in the future. But the more you live off credit, the more of your money will disappear simply to meet interest payments.

Living without a credit card will take away the temptation to overspend. (Of course those of you who pay off your card every month and earn cashback or rewards for using the plastic can continue to do so, as long as you really are on top of your spending. Me? I'd rather not take the risk.)

My second tip? Ignore all the money-saving sites and discount codes that you come across. They seem to be turning into a nefarious encouragement to spend. One of the most wrong-headed phrases I seem to hear more and more from people is: "At that price you can't go wrong."

Sure, there are plenty of bargains out there – but if you end up buying something just because it appears a great deal, the truth is that you're spending money you don't need to. Pretty soon, you're buying so many bargains that you're deep in debt.

I'll let you into a well-known secret. Most of these so-called bargains are just companies getting rid of stuff that they couldn't sell. So avoid the money-saving sites and actually save some money for a change. (Again, if you're planning to buy something, then it make sense to seek out discounts or vouchers. In that case, the sites can prove a great boon.)

Third tip is one that I hope many of you practise already: check out the small print. Any financial arrangement you enter into is not as clear as it seems.

For instance, is a five-year fixed-rate mortgage at 4 per cent better than a similar 5 per cent deal? The lower rate may actually be much more expensive once you've taken into account the arrangement fee, the booking charge, or the early repayment penalty.

What about a zero per cent credit card? Surely that's "at a price that you can't go wrong"? It depends on the handling fee. Barclaycard's new 24-month offer, for instance charges 3.2 per cent.

In other words, to get the 0 per cent deal, you'll have to pay £32 per thousand pounds transferred to the card. In addition, you run the risk of moving from a low-paying card to a much higher rate.

The same is true, of course, of charges on investments. Fund managers can charge as much as5 per cent, for instance, which means the funds need to outperform the market by at least 6 per cent to make you any money. It's all there in the small print. Look at it closely and you will end up better off. Happy New Year!

s.read@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Russell Brand was in typically combative form during his promotional interview with Newsnight's Evan Davis
peopleReports that Brand could stand for Mayor on an 'anti-politics' ticket
News
The clocks go forward an hour at 1am on Sunday 30 March
news
Arts and Entertainment
The Doctor finds himself in a forest version of London in Doctor Who episode 'In the Forest of the Night'
TVReview: Is the Doctor ever going stop frowning? Apparently not.
News
Voluminous silk drawers were worn by Queen Victoria
newsThe silk underwear is part of a growing trade in celebrity smalls
PROMOTED VIDEO
Sport
footballMatch report: Real fight back to ruin Argentinian's debut
News
Candidates with surnames that start with an A have an electoral advantage
newsVoters are biased towards names with letters near start of alphabet
Arts and Entertainment
Isis with Lord Grantham (Hugh Bonneville)
TV
Arts and Entertainment
Jay James
TVReview: Performances were stale and cheesier than a chunk of Blue Stilton left out for a month
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Compensation and Benefits Manager - Brentwood - Circa £60,000

    £60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

    Data Analyst/Planning and Performance – Surrey – Up to £35k

    £30000 - £35000 Per Annum plus excellent benefits: Clearwater People Solutions...

    IT Systems Business Analyst - Watford - £28k + bonus + benefits

    £24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

    Markit EDM (CADIS) Developer

    £50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?