Sort out your post-Summer money

September is a difficult month for parents. Summer holidays are over, school uniforms have been bought, – and Christmas is looming. So if you’re wondering where the money is going to come from you’re not alone! But don’t panic. A few minutes sorting out your finances is one occasion when time really can mean money – and peace of mind.

Debts.
Everyone has debts at some time. And they can be alarming. But remember two rules. Do not ignore debt – it will only get worse! If you deal with it, you will fee better. Second, make sure it costs you as little as possible.

Never have an unauthorised overdraft. There is nothing wrong with going overdrawn – it can be a very flexible way of managing things. But unauthorised overdrafts can cost you 30% plus fees for letters. So keep within your limit. Some banks have very low rates for overdrafts. Online bank cahoot offers £250 at 0% and charges as little as 8% for an agreed overdraft above that – half the cost of many competitors.

Use credit cards wisely. Credit cards are another flexible way to manage money – and borrowing can cost you noting. Why not take out one of the many credit cards that offer zero percent on transferred balances? You can then move your balance and pay it off month by month before the 0% period ends –which is normally after six months though with PC World Marbles card it lasts for nine months. But don’t spend on it. For that take out a low interest card such as Intelligent Finance at 8.9%. And cut up your store cards – they can cost 29% if you don’t pay them off in full.

Savings
If you have savings then the best thing to do is use them to pay off a debt. But not everyone wants to do that – they like that little pot of money for emergencies or treats. So make sure it is working for you.

Taxpayers should save in a cash ISA – no tax is paid, you can put up to £3000 a year into one and there are no restrictions on taking it out. Best buys are Kent Reliance Building Society and Safeway – both paying 4.2% free of tax. If you have already done that then top savings account at the moment is telephone and internet bank ING Direct paying 4.3%, but it’s taxable

Even money in your current account should be working for you. Cahoot pays 3.2% and Intelligent Finance is a shade behind at 3%. Or you can get 3% on the High Street with Abbey National, Bank of Scotland or Halifax if you have at least £1000 a month going into your account – or 3.2% with LloydsTSB with at least £2000 a month going in. Most others pay a measly 0.1% - well worth leaving them for. Switching current accounts is easy – the bank does all the hard work of moving direct debits and standing orders.

Check out rates at moneyfacts