According to recent research, the cost of running a home is almost half of a household income, with Brits paying out around 45% of post-tax earnings on household bills and mortgages.
The study showed that owners of three-bedroom homes spend an average of £1,634 a month on household running costs, while renters pay £1,576 per month.
Here are seven ways to help you cut your household costs.
- Compare energy prices – with gas and electricity prices on the rise, use an energy comparison website to see if you could be getting a more cost-effective deal elsewhere. According to a study, seven in ten customers are on suppliers’ most expensive tariff — paying as much as £389 a year more than those on the firms’ best deals.
- Check your insurances and mortgage costs – don’t automatically let your annual car, home or other household insurance renew. Shop around and see if you can get a better deal elsewhere. And if you are on a standard variable rate mortgage, see if you can switch to a lower, fixed rate deal. You could save hundreds of pounds a year.
- Reduce your home phone and broadband bill – with so many telephone and broadband service providers competing for your business, shop around and take advantage of any new customer deals available.
- Check you are in the right council tax band. In 2015, over 12,300 people in England and Wales appealed against their council tax band successfully, getting a reduction in what they pay, and potentially also getting a rebate for the tax they had overpaid. You can check and (if necessary) challenge your council tax band here.
- Turn the temperature down – according to the Energy Saving Trust, turning a room thermostat down by one degree could see you make savings of £80 – £85 in a year.
- Don’t waste water – fill your kettle only with the amount of water you need. You’ll use less electricity each time, which can add up to savings of as much as £20 over year. You can read more water saving tips here.
- Check your Direct Debits and other regular outgoings – do you regularly review the payments that go out of your bank account and on any credit cards you have? If not, take a look now. Many people have direct debits and other regular payments set up to come out of their bank account that they no longer need, for example, a gym membership they no longer use, or a mobile phone insurance policy for a phone that no longer exists, and so on.
Finally, if you need cash in a hurry – perhaps your washing machine has broken down when you have a pile of laundry to do – don’t just go overdrawn and hope for the best. Overdraft fees, especially if you use an unauthorised overdraft, can be very costly indeed.
Look at your other options, such as using a credit card or applying for a instant short term loan online, and work out which way will be the most cost-effective to borrow money.