Bank holiday blow-out? Top budgeting tips

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If you've been pushing the boat out, Vicky Shaw finds out how to restore your bank balance to full health.

If your bank balance is looking a bit battered right now, as a result of spending splurges over the recent Bank Holidays, you're not alone.

According to figures from Barclaycard, consumer spending grew by 2.5 per cent year-on-year in April, as the spring weather encouraged people to loosen their purse strings. Spending in pubs and restaurants and garden centres have seen some particularly big jumps.

Whether you've had a break away, over-spent in the sales or started a new home improvement project, now's the time to do some repair work to your finances.

"Consumers could have easily been swept away with the long Bank Holiday and now be puzzled as to how to get their finances back on track," says Rachel Springall, a finance expert at Moneyfacts.co.uk. "It may be hard to resist a last-minute break away or to take advantage of sales, even if it means their bank account dipping into the red or indeed incurring interest on a credit card - but thankfully there are finance options out there to soften the impact of any splurge."

Here, Springall shares five top tips...

1. Count up the true cost of any credit card debt
One of the most convenient and safe ways to spend online or in-store is to use a credit card, which offers certain protections for consumers if something goes wrong with the purchase. But borrowers making only the minimum repayments on their cards could take some time to pay the money back. There are many 0% introductory balance transfer cards available that could be used to shift debt for a bit of breathing space.

2. A low-cost loan could be ideal for home-improvers
Whether consumers are counting the cost of a recent DIY escapade or plan to make a start on a project soon, a low-cost personal loan could be ideal for those who want a fixed term to repay any debt.

It's important to keep in mind that out of all successful applicants, a minimum of 51 per cent are offered the advertised rate - so some borrowers may find they are offered a different rate, depending on their circumstances.

3. Get out of the red and into the black
Overdraft charges can quickly add up, but costs can vary and some providers will offer a small interest-free 'buffer' if you're only overdrawn by a small amount. As well as making sure their overdraft suits their own spending habits to minimise the costs, customers could also consider using a money transfer card to credit their bank account for a fee.

4. Get a free cash perk when switching a current account
With many current account options to choose from, if your bank account is failing to work hard enough for you, you may wish to consider switching.

5. Start saving to avoid a debt pitfall
It may be easier said than done, but saving little and often really is the key to growing a pot towards any specific goal - therefore avoiding getting into debt in the first place. Using a fixed-term regular savings account can encourage consumers to put aside some cash for short-term goals such as home improvements or a holiday.

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