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Annual Direct Debit Audit

At least once a year I will go through all my direct debits - from insurance payments to council tax. I make a note of how much I'm paying to each one and create a monthly total. I'll then extend this total to an annual total. This can be a little scary.

I'll then dedicate a morning, sometimes even a day to cutting them back and seeing where I can save a few pounds. It can seem like a lot of work for little reward - spending 30 minutes to knock £5/month from a direct debit payment. But, when you do the maths that £5 becomes an annual saving of £60. Not bad for half an hours work.

This process is then repeated across every payment. For those payments where a saving can't be made - for example a loan repayment that cannot be moved, I'll make a note of when I might be able to cut it down. This could be the end of the policy. I know that the next time I come back to the list, I've then got a reference for when I might be able to save.

Start Big

Spend more time working on the larger of the payments. For most people that will be your mortgage. It's likely your biggest debt and also your biggest monthly outgoing. Even a small saving here can have a huge impact. Even cutting 2% from a monthly payment of £750 would save you £180/year.

Dangerous Direct Debits

Direct debits are dangerous things - you forget about them and the money just keeps getting taken from your account. Because the amounts taken individually aren't huge and the fact that you're used to paying them they end up unnoticed.

Take half a day to go over your finances. I did mine recently and shaved off over £150/month. That's a saving of almost £2,000 per year for a morning's work. If only I got paid that for my actual job!


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