7 top ways to cut household costs

finance

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.

  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.

 

 

 

 

 

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