By: Jasmine Birtles, Founder, MoneyMagpie.com
It looks like we may be coming out of recession finally but we're not
out of the woods yet. Make sure you're a money winner this year by
following these simple steps to financial freedom.
Step 1 - Watch the sales
The January sales can be a great time to pick up bargains but they're also a danger area if you're not careful. So:
* Do your research before the sales and only go to buy specific things. Don't go looking for any old bargain because that's what you'll end up with - something that's marked down that you didn't want and won't wear.
* Go for big products like sofas, washing machines and so on. If you need to furnish your home, this is the time to do it.
* Go for Christmas things like cards, wrapping paper and gifts for next Christmas. These goods are often at least half price in the sales. Tuck them away and you'll be pleasantly surprised next December!
* Remember that your usual rights hold true during the sales which means that if you buy something that is faulty - and you don't know that it's faulty when you buy it - you can get your money back or a replacement. However, shops don't have to refund you if you just don't like something anymore.
Step 2 - Get out of debt
It's more important than ever to get out of debt as fast as possible. If you haven't faced it yet, make January the time to start your way towards freedom from debt. This is the time to look at all your outgoings and see where you can cut them down or switch to a cheaper option.
Look at your various debts and see if you could switch any of them to a 0% credit card or low lifetime balance card. List your debts for yourself according to how expensive each one is (in other words, what their APR is). Then each month, pay as much as you can into the most expensive one and just pay the minimum on the others. Keep doing that until you are down to nothing.
If it all seems too much to bear on your own, get free, professional help from:
* the Citizens Advice Bureau (www.citizensadvice.org.uk),
* The Consumer Credit Counselling Service (www.cccs.co.uk)
* National Debtline (www.nationaldebtline.co.uk)
and join the Moneymagpie debt-busting plan where we send free emails to you to help you get out of debt.
Step 3 - Live a simple life and take advantage of discounts
One of the better aspects of the recession is that it has made us lose our appetite for the rampantly consumer lifestyle we've been into for the last twenty years. Now, it's cool to be thrifty. So embrace the new cool and live a simpler, cheaper, happier life.
* Haggle. Yes, haggle in shops every time you go in. Even high street stores will consider a discount now if you pick the manager and ask nicely enough. If you can't get a discount see if they will throw in free delivery or maybe two for the price of one.
* Make sure you get a discount on everything. Sign up to a few discount voucher sites and trawl through to find bargains (there's a lot of rubbish on all the voucher sites but there are a few gems hidden there). Also sign up to the Moneymagpie.com 'Bargain Alert' which sends the latest bargain news to your inbox.
* Recycle everything you can including old envelopes (for writing lists), clothes (darned, re-made or cut-down to make cleaning cloths), jars (for home-made jam or for storage) and so on.
* Get into energy efficiency including insulating your loft, putting the thermostat down and plugging all gaps around doors and windows to stop drafts.
* Don't send greetings cards, send e-cards and tell everyone it's because of your 'carbon footprint'. For just £7.25 you can send as many delightful, all-singing, all-dancing ecards as you like, all year, from Jacquielawson.com.
* Ditch your expensive gym membership and save on bus and train fares by walking and cycling to the shops, to work or anywhere you need to go. Once you get in the habit you will find the pounds drop off your waistline and fall into your wallet without your even noticing it!
* Get free holiday accommodation by doing a house-swap. Join an agency like Homeexchange.com to swap with other families all round the world. This means you can have a fabulous holiday somewhere lovely and hot for just the price of your plane ticket
* Get free entertainment by being part of the audience at your favourite TV shows. Sign up to the BBC website and Lostintv.com.
* Make free phonecalls anywhere in the world using Voip (Voice over IP) technology. Join Skype for free, make sure your friends do too and you can talk for hours through your computers for nothing.
Step 4 - Plan for your future
It's more important than ever to think about your financial future and invest wisely for it. Don't waste time or effort asking your bank manager for advice. You will just be sold some under-performing products that make them money. Follow this system:
1. Save - you must first make sure you have enough money set aside in a savings account to cover all your essential bills for at least three to six months, in case you suddenly can't earn.
2. Diversify - you don't have to just have a pension for your retirement. In fact it's best to put money in a variety of products including pensions, stock market investments, property, bonds and even collections.
3. Use the tax breaks - pensions are useful tax vehicles because the government puts in the tax you would have paid on the money you invest which is great for high earners. Also, use up your ISA allowance each tax year. Remember, in April it goes up to £10,200.
Jasmine Birtles is founder of Moneymagpie.com. Join their free, weekly newsletter here for money-saving and money-making tips straight to your inbox every week.