Don't kiss your money goodbye this year - get ruthless, and get saving Now Christmas is over, many of us will be feeling broke – so it’s time to roll up your sleeves and find ways to knock your finances into shape. Many people make New Year’s resolutions to be smarter with their money, but in reality we hardly ever get round to doing anything about it – so let’s make 2013 the year that you regain control of your finances. Before you start, gather together your last six months’ bank statements, together with your latest credit card bill and your most recent ­mortgage statement. 1 - A ruthless review of your direct debits and standing orders Take a look at all the regular payments going out of your bank account and for each item ask yourself can I manage without it? In many cases you don’t have any choice but to pay items such as your council tax or water bill, but there are other entries that you could possibly do without. Cancelling payments to a gym/fitness club, a dental plan, magazine subscription, club memberships and other non-essential bills is a good way to kick-start your money saving plan and put extra pounds in the coffers. 2 - Ditch and switch those expensive card balances If you’re like a lot of people after Christmas dreading the monthly ­statements for your store cards and credit cards, January is an ideal time to save some serious money and clear your debts. For example, if you’ve got £2,000 spread across your cards at an average interest rate of 19% APR, and you pay back 5% of the balance each month, it’ll take you almost nine years to clear the balance and cost you more than £835 in interest charges. Simply by switching the debt to a 0% balance transfer card and paying off £100 per month, you’d be debt free in just over a year and a half and all it would have cost you is the balance transfer fee of around £60. 3 - Move your ­mortgage to one of the ultra-low fixed-rate deals With mortgage rates at rock bottom levels, now’s a great time to fix your payments for the next few years. With the average standard variable rate at 4.86%, if you’ve got a £100,000 mortgage and 15% equity you could switch and take advantage of the five-year fixed rate from The Co-operative Bank at 3.79% with no product fee. Based on a 20-year mortgage term left to run you could cut your monthly repayments from £652 to £595 – saving you £57 a month and a massive £684 over the course of the year or £3,420 over the five-year term. 4 - Wipe out that ­overdraft If you’re always in the red, maybe it’s time to take decisive action to clear it once and for all. If you’re £500 overdrawn for at least three weeks of every month, you could end up paying £20 per month in charges with some banks. That’s a £240 hole in your budget you could do without. If you take out a rate-for-life card from MBNA, you can transfer some of your credit limit into your bank account to repay an overdraft. With the interest rate just 5.9% APR for as long as it takes to clear the debt, by paying £20 per month to the card instead of to the bank, you’ll have wiped out your debt in two years and three months. The total cost to you will be £55 which is a one-off transfer fee of £20, with interest costs of £35. 5 - Loyalty doesn’t pay when it comes to insurance Don’t be loyal to your home or car insurance provider – compare quotes every year when your renewal comes in and move if you can get the same cover for a cheaper price. It’s definitely worth spending 15 minutes of your time shopping around – I’ve just carried out a new quote for myself via a comparison site. I currently pay around £260 per year for my car insurance, but rather than take the convenient route and renew ­automatically, I searched online and got a quote from Swinton for just £142. 6 - Are you paying over the odds for life cover? The cost of life insurance has fallen by nearly 30% in the last 10 years, so there’s a big opportunity to cut your costs. If you have life insurance that you took some years ago, there’s a good chance that you could reduce your premiums simply by taking out a replacement policy from the likes of leading online broker, like www.cavendishonline.co.uk. It’s not unusual for people to cut their insurance costs by £20 per month or more in some cases, so it’s worth spending a few minutes online to see how much you could save. There are a couple of important factors to bear in mind before you switch your policy: Check that you’re not giving up any special benefits on the original plan which aren’t included on the new policy. To avoid the risk of having a period without any cover in place, don’t cancel your existing policy until the new one is up and running. If you’re a lot older now than you were when you originally took out your policy, or your health has deteriorated, a new policy could prove to be a lot more ­expensive. If that’s the case, you’re probably better with the policy you’ve got. How to become a savvy spender It’s not just a review of your finances that can save you money, there are other simple measures you can take to make your income stretch that little bit further. None of these ideas are rocket science and they won’t take up too much of your time, so what have you got to lose? Stick to your New Year promise and free up some funds. You’ll feel a whole lot better about things when you become less dependent on your cash-hungry overdraft and credit cards. De-clutter your home At this time of year it’s a struggle to find a home for all your new Christmas gifts, so why not have a full-blown clear-out of all the stuff you no longer use and stick it on eBay. It’s a winner on two fronts as your house will be less cluttered and your bank account will look a bit healthier into the bargain. Try a home-made lunch Carry a notebook with you for two weeks and write down everything you spend – you may be surprised how much cash you fritter away on coffees, sandwiches and that beer after work! Simply by making your own packed lunch a couple of days each week rather than shelling out for expensive shop bought ­sandwiches can save £30 a month. Be a smart food shopper Don’t impulse buy at the corner shop. Instead, plan your food shopping and go to the supermarket just once each week. Also, don’t forget to use your food in the freezer – too many people use it more as a store cupboard and forget what they’ve actually got in there. In a recent trial, Moneynet readers saved between £10 and £30 per week by doing this – and threw half as much food in the bin. Fill up the car for less Check out www.petrolprices.com to make sure you know where the cheapest fuel forecourt is near you. Even though fuel costs are sky high, it still helps if you can save the odd 2p or 3p per litre. Be more frugal with your energy use Try and keep those energy bills down – don’t leave appliances on standby and turn the thermostat down one notch. Every degree lower you switch it down can save you £50 or more per year. If your heating is on a timer, set it to come on 10 minutes later and go off 10 minutes earlier – that way you’ll save 30 hours of energy costs in just three months. Check out more ways to reduce your energy spending and find out about insulation grants on the energy saving trust website energysavingtrust.org.uk Find a cheaper energy provider Gas and electricity prices are getting more expensive year by year, but the prices still vary quite a bit between the different providers. You can still save more than £300 per year by switching your gas and electricity company. Visit: energyhelpline.com to see how much you could save.

The troubled financial giant – 81 per cent owned by the taxpayer – faces punishment of up to £400million the Libor affair

Chancellor George Osborne

Chancellor George Osborne is set to demand RBS bosses hand over ALL their £250million bonus pot as punishment for the bank’s involvement in interest rate-rigging, the Sunday People has reported.

The troubled financial giant – 81 per cent owned by the taxpayer – faces fines of up to £400million this week over the Libor fixing scandal.

But Mr Osborne is determined that the bank’s leading fatcats foot the bill and not the taxpayer.

Finance director Bruce Van Saun would lose out on the £1.8million he got on top of his basic pay last year, while investment banking boss John Hourican is expected to see a £3million hole in his wallet.

Two unnamed executives, who last year pocketed bonuses of £2.9million and £2.8million, also stand to take a hit, while others would lose hundreds of thousands of pounds.

Top boss Stephen Hester has already said he won’t take his £1million bonus because of last summer’s computer meltdown which froze millions of customers accounts.

RBS is expected to agree a fine of up to £400million next week with US and British authorities for rigging rates.

One source close to the Treasury said: “The Chancellor wants to be able to say that the taxpayer is not paying the price for misconduct by bankers – especially when they work for a publicly owned bank.

“It will be a few days before we find out the full extent of the fine but I think that’s the position the Chancellor is expected to take.”

But Labour MP John Mann, who sits on the Treasury Select Committee, believes the cash should be taken from money ALREADY paid out in bonuses.

He said: “This move of Osborne’s is smoke and mirrors. They shouldn’t be getting a bonus pot in the first place.

“I would take action to get the money back from those who’ve been paid bonuses in previous years.”

The Treasury is expected to insist the money to pay the fines comes from last year’s bonus pot which could be around £250million. And they will demand future bonuses are also targeted to pay the fine.

This is just one of a series of penalties being imposed on the bank – bailed out in 2008 when led by then chief exec Fred Goodwin.

RBS’s own remuneration committee is drawing up plans for a “flat tax” on the pay packets of hundreds of directors. It would see about 15 per cent of previous pay awards clawed back and could raise £100million.

Last year Barclays was fined £290million for Libor rigging, of which £58.5million was in the UK, while UBS was hit for £940million, including a £160million UK penalty.