(The following is a guest post)
Cutting expenditure can be tough when finances are already tight. Every little hurts. But there are relatively painless ways to reduce overspending and cut costs to boost budgets with this simple five point plan.
Reduce Debts
Cutting interest payments on debts is a sure-fire way of keeping more money in your pocket. With the average credit card interest rate over 15%, if you don’t pay off your balance in full at the end of each month, the cost of your purchases is almost 15% more than the price on the label. Keep an accurate note of the due-by date for payment and pay off the balance in full to avoid all interest. Alternatively, transfer balances to a card offering 0% on transfers, with some providers offering up to 2 years interest-free. Watch out for initial set up fees. And while “buy-now-pay-later deals” in catalogues can seem attractive to spread costs on larger items, pay off the balance in full before the due date or that “interest-free” deal can turn sour when stung by high charges.
Save on bills
Renew your mobile phone contract and you’re likely to be locked in for up to two years. Is a new phone really that essential? If you’re under or over using your allotted minutes and internet time, it’s time to switch to a cheaper plan. Does your landline package include expensive services you don’t use? Many providers offer combined internet, TV, landline and mobile deals for reasonable subscriptions. If you are a freelance contractor in the UK, follow the IR35 rules, avoid late penalties and get your tax returns in on time. Consider switching gas and electricity suppliers. Reduce your energy consumption by turning off plugs overnight and reduce water consumption by limiting shower times. Better still, share!
Change banks
Banks are beginning slowly to become more competitive. Some offer cash incentives to switch and if you regularly pay in a salary, some banks will offer more attractive interest rates. Ensure you’re not paying for premium banking if you don’t need the services. There’s no need to pay monthly fees for maintaining a bank account these days.
Shop around for insurance
The insurance market remains one of the most competitive. Avoid automatic renewals on car, household and travel insurance and you could save a tidy sum by comparing prices from different providers. Consider increasing your excess to lower the premium. Negotiate with your existing insurer and you might see them competing for your business with ever lowering quotes.
Shop smart
There are great savings to be had on the weekly grocery shop. Don’t be picky about own brand budget ranges for essentials. The difference in quality can be negligible for a huge percentage saving. Many voucher code websites offer good discounts on high street stores and restaurants. Better still, avoid eating out by preparing a packed lunch for work. Buy second hand CD’s, books and video games and avoid the impulse-buy temptations online.