Are you paying out needlessly?

By tracking these down, you could discover long forgotten payments you've been shelling out for over years.

Don’t get me wrong, in many cases regular payments can save you cash. For example, paying by fixed monthly Direct Debit saves around 10% on energy bills and credit card direct debits mean you can’t be hit by late or missed payment fines and the ensuing hit to your credit score.

However, many people are paying direct debits for things they no longer need or use. One of the most extreme cases I came across was a man who’d been paying for two old insurance policies. He’d been forking out £20 every month on them for three years – a whopping £720 wasted. He asked if there was anything he could do about it and my only answer was, “stop paying!”

Don’t let this happen to you. The solution is to unearth every single regular payment and stop the unnecessary ones.

Before auditing your payments though, you need to understand there are three different types of regular payments, and the way to cancel depends on the one you’re dealing with. The levels of protection vary from hugely pro-consumer, to a virtual licence for companies to steal your cash.

Standing orders. You're in control.

The first is a standing order. This is an instruction from you to your bank to pay a fixed amount out at a regular period. The method’s commonly used to pay an individual a fixed amount every month, contribute to your favourite charity or pay rent to landlords. It's usually free and you can cancel it whenever you like.

Direct debits. You're mostly in control, but have extra protection.

Direct debits are where you let companies take money from your account, and while often it's just for a fixed payment, like with utility bills, be aware the amount could be variable, such as an instruction to 'pay my credit card off in full’.

As direct debit is a specific scheme, with strict rules that companies must sign up to, you're protected by the Direct Debit Guarantee. This means you've a right to contact your bank to cancel at any time you like, and if there's an error you get a full refund from the bank, rather than the company itself. Though do always check with that by cancelling you’re not in breach of contract.

Recurring Payments. Danger - you've no control.

The last type of regular payment is a recurring payment. These are regular payments set up from credit or debit cards, rather than bank accounts.

Yet a huge WARNING: recurring payments are dangerous! They used to be called 'a continuous payment authority', but whatever the name, they're hideous for one reason: you can’t cancel them; only the company you’re paying can do it.

This means if you want to end a subscription and can't contact it, or fall into dispute with it, there's little that can be done, without huge effort, to stop it.

Common types of recurring payments include telecom companies, subscription-based services such as TV channels and, most worryingly, adult entertainment providers.

The difficulty of cancellation, combined with the embarrassment factor many feel about taking this to their bank makes rich pickings for unscrupulous operators.

Yet even with legitimate companies it can be a nightmare. Many Setanta sports customers found cancellation very tough due to poor procedures. Yet as only the company can cancel them, it left the money dripping out.

Many people simply try and cancel their credit card at this point. Sadly that often doesn't work, as card companies only usually close down an account where there are no payments left to come out of it.

If you are a victim, first try contacting the company that’s taking the cash.

If that doesn’t work, dispute the transaction with your debit or credit card firm, saying it’s unauthorised. Under the banking code, the bank has a responsibility to sort it out.

The last resort is to make a complaint to the free Financial Ombudsman Service, the independent arbiter of financial disputes. Hopefully, just the threat of this to your credit card provider should be enough in the first place.

Do a Direct Debit Audit

Now you know the different kind of payments, it’s crucial to go through every one to check whether it’s still worth it.

Most online bank accounts allow you to click a section which displays all your standing orders and direct debits. If not, there should at least be easy access to a year's worth of statements.

If you’ve a branch or telephone account, your bank should be able to list all the standing orders and direct debits for you. If not, then at the very least request a year's statement.

Yet sadly, for recurring payments, the worst type of regular payments, it’s much harder to detect, as they just appear on your statement like any other; they're not categorised out. So you're going to need to scour your statements to find them.

Once you’ve located them all, for each payment ask yourself three questions. Is it paying for something I use? Is it worth it? Could I find the same service or item cheaper?

Posh eyeshadow for £2.50

This month’s £2.50 Prima magazine comes with a fab freebie: a voucher for a posh Elizabeth Arden eyeshadow palette, worth £25.

You get an Elizabeth Arden Heritage Color Intrigue Eyeshadow Quad - a great budget Xmas pressie.

To grab one, simply buy the December issue of Prima and cut out the voucher from the middle insert.

Take it along to a large Boots where apparently they’ll give you a free skincare consultation before handing over the eyeshadow.

Call 0845 0708090 to find your nearest participating store. The offer is valid until 31 December 2008.

£9 hotel rooms

Budget hotel chain Travelodge has a winter sale on, offering 'saver rooms' in UK hotels at £9 per night, for stays between Feb to April 09. Plus there's a new batch of £19 rooms (usually £29-£59) in Dec/Jan, perfect for holiday time visits.

To grab the cheap rooms, go to www.travelodge.co.uk, and search for dates and hotels available. Be aware, these rooms must be paid for in advance and are non-refundable.

Travelodge tends to release the £19 rooms in tranches and then leave them there until it sells out, so go quick.