By Phillip Ward, of the Cumberland Building Society

Last updated 00:38, Thursday, 29 May 2008

Rising fuel costs and food bills have left us all feeling the pinch. Phillip Ward of the Cumberlnad Building Society has some tips on surviving the credit crunch.

• Vist the Cumberland Building Society website

Look after the pennies: If the cost of living is taking the money off us before we can save it, we need to spend less to put the pounds back in the pocket

My mum always used to say: “Look after the pennies and the pounds will look after themselves.” Typically though, when I got the pounds I spent them. Still do, in fact.

Now that the cost of living is rising and it seems that every time I fill the car up with petrol it costs noticeably more than the last time, I could do with a few extra pounds in my pocket.

Experts are telling us that the current turmoil in the financial markets could take years, not months, to unwind. So it seems that the message is clear: batten down the hatches, because we could be in this for the long haul.

So, if the cost of living is taking the money off us before we can save it, we need to spend less (save the pennies) to put the pounds back in the pocket.

Here are a few straightforward steps which, although seemingly obvious, do work…

It’s difficult to appreciate where our money goes when we’re constantly spending it. It’s easy to think we can all give up the weekly takeaway to save a few quid, but when you actually see how much you’re spending on them, it really hits home.

My first tip, therefore, is to check what you spend. Write down what your outgoings are and take time to look at what you’re getting.

With the reality in front of you, it becomes easier to see where you can cut back.

Second tip. Make sure any debts you have are under control.

It’s easy not to bother paying anything off the credit card one month because “it probably won’t make a difference”, but it does.

A £2,000 balance on a credit card charging a typical interest rate of 15 per cent will cost around £25 per month in interest.

If you’re someone who doesn’t clear their balance in full every month, you may save money by switching to a 0 per cent rate credit card or a credit card that offers a reduced interest rate on the transferred balance until it is paid off.

Finally, make sure you’re on a competitive mortgage deal.

The mortgage, which is usually the single biggest debt that most of us have and therefore the single biggest outgoing each month, is often the last area that we look at when trying to save money.

So the final tip, but possibly the one that will save you the most, is to contact your current mortgage lender and check what rate you are currently paying, consider any redemption charges on your existing mortgage, then find out what’s on offer elsewhere.

But remember, mortgages are like anything else you buy; there are a lot of different places selling a lot of different varieties, so to make sure you know what you’re buying, get some proper advice.

A good mortgage advisor will talk through the different types of mortgage, the wide range of products available and be able to compare them to your existing mortgage.

By doing this, you will see that switching your mortgage might just save you a few more pounds.

• For details of the Cumberland’s remortgage and cost comparison service, call (0845) 601 8396, pop into your local branch or visit www.cumberland.co.uk.
• Your home may be repossessed if you do not keep up repayments on your mortgage.
• Phillip Ward is a marketing manager at the Cumberland Building Society.