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| Ten ways to lower your outgoings – this month and every month | |
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Here’s some really good advice from Experian: With bills for everything from food to electricity rising faster than the speed of sound, it can be hard to work out where your money’s actually going. If there’s a growing gap between your income and your spending, take heart – there are ways to lower your outgoings, this month and every month. It just takes a combination of imagination and dedication, as these suggestions show. 1. Find out what you spend You need a benchmark before you start, so note down absolutely everything you spend, from the morning latte to the mortgage or rent. Don’t forget quarterly bills, such as utilities, and annual bills, such as car tax – divide them into monthly chunks. This will highlight the black holes swallowing your cash and you may see areas where it’ll be relatively easy to cut back. 2. Set yourself a target If you’re spending more than you earn, then you have an obvious target – to bridge that gap. But maybe you want to save for something special, whether that’s a holiday, a car or the deposit on a flat. Work out how much you need to put aside each month and aim for it but don’t make it too tough. Budgeting is like dieting – if you’re aiming for the impossible, you’ll eventually fall off the wagon and have a binge. Allow yourself the occasional luxury, even if it’s as small as a weekly trip to the cinema. 3. Improve your credit rating If you want the lowest interest rates on anything from credit cards to mortgages, you need the best possible credit rating. Start by checking your credit report regularly and monitor what lenders see when you apply to them. There are some quick fixes that could improve it, such as registering to vote and closing redundant accounts. If there’s a genuine reason for any missed repayments, such as an accident or illness, you can add a note of explanation. See your Experian credit report now – it’s free. 4. Find better deals… Even today, it’s a competitive world, so research what’s available in the way of energy, insurance, loans, cards and mortgages. Try specialist magazines and websites and the personal finance sections of newspapers before hitting the price comparison sites. That way you’ll have a good idea whether what you’re being offered really is a good deal. 5. …but read the small print before signing It may seem like common sense to shift what you owe on your credit card to a 0% interest deal, swap your mortgage for one at a lower rate or roll up all your debts into a single loan. And it could save you thousands – but read the small print first. Look out for application and arrangement fees, check that you won’t be charged an early redemption penalty by your existing lender and watch out for high interest charged on new spending. All these factors can turn a good deal bad. 6. Feed yourself Remember that latte? If you also buy lunch from the local shop or cafe then you could easily be blowing £5 every working day – that’s more than £1,000 a year. Use the free office coffee machine, make a packed lunch and that’s a real saving. If you also abandon ready meals and take-aways in favour of home cooking, you could save at least twice as much. 7. Walk on by The price of petrol is sky-rocketing, so leave the car in the garage and try a car share instead. With three or four people in one vehicle, you’ll slash your spending. Fares on public transport are also a victim of inflation, so try walking at least part of the way instead. 8. Set up a swap shop Get together with friends and family to swap skills, clothes, garden produce – whatever you each have to offer. You might know a great handyman who’ll fix your shelves and mend your dripping taps in exchange for some home-made cakes or baby-sitting. You’ll almost certainly be able to refresh your wardrobe for free and save what you’d have spent in the mall or High Street. 9. Cut the cost of your home If the heating bills are soaring, some cheap insulation and a new jacket for the tank could pay you back handsomely. Don’t leave the tap running when you brush your teeth and only use the washing machine when you have a full load. If you’re struggling with the mortgage, you can let a room for up to £4,250 a year tax free under the Rent a Room scheme. Remember to ask your lender’s permission first. 10. It’s good to talk Don’t be tempted to skip on repayments and bills. You’ll probably be hit with a penalty fee and missed payments will be shown on your credit history for at least three years. It will also depress your credit rating, so you could end up paying a lot more in interest and fees. If you’re in trouble, talk to your lender or supplier at the first sign of problems – they’ll help to find a schedule of payments that you can afford. If you need expert advice, try one of the charities offering free money counselling, such as Citizens Advice at www.citizensadvice.org.uk, the Consumer Credit Counselling Service at www.cccs.co.uk or National Debtline at www.nationaldebtline.co.uk. • See your free Experian credit report with a 30-day trial of CreditExpert, the UK’s leading online credit monitoring and identity fraud protection service.
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