7.smart money moves to make today


by Lorna White |

The new tax year is the ideal time to refresh your finances and see where you can free up cash and get new income. Use our simple ways to get started!

1. Earn tax-free cash

As of April 6 2017, you can earn an extra £1,000 a year tax free. The trading allowance lets you make up to £1,000 a year by selling goods or providing a service such as gardening, ironing or cleaning, says Comparethemarket.com. You can also sell skills online on sites such as Skillshare or Fiverr or make money from you hobby selling your goods via an online market place such as eBay or Etsy. The only catch is that the £1,000 tax break is available for one or the other - so if you earn extra cash doing a friend’s garden and you make and sell jewellery, you can only do one of them tax free.

2. Turn you home into a money spinner

Bedroom going spare? Earn up to £7,500 tax-free by renting out furnished accommodation in the home you live in. Householders letting a room earn around £8,500 a year in London to £4,860 annually in Leeds, according to SpareRoom. Just make sure you declare extra rental income to the tax office (HMRC) and tell your mortgage provider. If you want a weekday-only lodger, try websites Mondaytofriday and Fivenights.

Earn an additional £1,000 annually tax-free by renting out unused space at home. You could let your loft or spare room as storage, garden space for an allotment, for camping or a parking space. Try companies such as Storemates, Campinmygarden and JustPark.

3. Boost your savings

“Consider unfamiliar brands to get a more competitive rate compared to the big high-street banks,” says Rachel Springall at Moneyfacts. “For example NatWest pays 0.01% on its easy-access account but RCI Bank pays a top rate of 1.10%.

“High-interest current accounts are another great way to earn extra, Nationwide pays 5% for the first year on its FlexDirect account while TSB pays 3% - however credit interest on current accounts is typically paid only on limited balances, so keep this in mind.”

Having a savings’ goal such as a holiday to help motivate you to tuck away more. Regular savings accounts are perfect for this goal, with HSBC, first direct, Nationwide and M&S Bank paying 5% for current-account holders.

Build in a cushion of cash savings, ideally enough for up to 12 months’ expenses.

4. Deal with debt

Some nine million of us think we have a debt problem with five million having disrupted sleep due to debt worries, says the Debt Advisory Centre. Don’t ignore it. This will only make it worse and lenders will just add additional interest and charges to what you owe. Speak to lenders and let them know you are in difficulty. Don’t bottle it up; keeping debts secret just adds to the stress so share with loved ones. Get in touch with with a debt advice charity to get back on track - try Stepchange or the National Debtline’s Mymoneysteps or Citizens Advice offers a web-chat service. Also look to see if you’re entitled to financial help via welfare benefits or grants using Turn2us.

5. Control spending

As household budgets are squeezed, cut back on non-essential spending. Use smartphone budgeting apps – try free Wally, OnTrees or the Citizens Advice Bureau’s Budget Tracker - or pen and paper to record what you spend daily. In a three-month experiment by insurer Royal London people using this approach reported striking changes in spending simply because they were detailing outgoings. Taking out enough cash for the week will help remind you of your budget and you’re more like to think about handing over a tenner than zapping your contactless card. Try a no spending day once a week, leaving your purse at home. When you buy a new item, put the equivalent in your savings. If you can’t afford to do this, don’t buy it!

6. Economise on essentials

Unless you tell your insurance providers that you don’t want to continue with your policies, they will automatically renew at the end of the year. The main problem with this is that insurers usually increase prices in the second year to recoup the cost of discounts offered from the first year!

Compare deals and switch every year using websites such as GoCompare to be sure you’re paying the best possible price. Switching energy providers could save you a considerable amount over a year. And when was the last time you reviewed your broadband deal? The best place to begin is a comparison website as this will show you the different tariff options. Try Yours Switching Energy (0800 008 7777) and Yours Switching Phone and Broadband (0800 083 4311).

When buying goods, take advantage of discount codes and cashback sites. For free things to do, check Eventbrite and if you’re over 60 take advantage of senior discounts.

Find out what's going to cost you more this month.

7. Get tax savvy

“It’s a simple equation - less tax to the government means more money for you. There are many ways to make sure your financial affairs are arranged to save large amounts of tax, which won’t cause so much as a raised eyebrow from the taxman,” says Danny Cox at Hargreaves Lansdown.

“Make the most of your allowances and tax bands. The personal allowance is now £11,500 meaning a couple can receive up to £23,000 a year tax free with the right planning. Use all of your other tax efficient allowances as if you don’t, you will lose them. These include using salary-sacrifice schemes and ensuring that your tax code is right,” he adds.

Words Yours money editor Sarah Jagger

For more money-saving tips, pick up the latest copy of Yours magazine

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