Four ways to tighten your finances

During challenging economic climates it is natural for people to tighten their belts a little - but how can do this effectively when it comes to financial products?

In some areas of your life it can be easy to cut your spending a little - perhaps taking a coffee from home on the train rather than buying one from a café - but other bills are harder to avoid. Financial products tend to fall into the latter category, but you should still do all you can to reduce the amount of money you pay to banks.

Below are four suggestions for how you might do this:

Trim unnecessary products - While some products may sound like they are great value, this does not mean you necessarily need them. For example, a packaged account may offer you a raft of benefits, but if you do not use any of them, then you are shelling out for no reason. There is a chance that you may have been paying for a product unnecessarily, which could even lead to compensation if you were mis-sold the deal. There are a huge number of people who have been able to submit a payment protection insurance claim because of this type of situation. 

Shop around - You should always shop around to see if another bank is offering a better deal - you never know, your bank may be so keen to hang on to your custom that they could try to match the terms.

Avoid charges - This is easier said than done, but if you can break the cycle of going over your overdraft or credit limit and getting charged, you can make small savings that add up over the course of a year.

Live within your means - This is related to the previous point, but is about shifting your attitude towards money. If you do not have enough money to pay for something then do not buy it; do not put it on your credit card or borrow from the bank, as you will probably end up giving the bank cash to borrow. By living within your means you can avoid this problem completely.