Working out how to save money on household expenses can often be seen as a difficult task – but rest assured it is easier than you think.
Reducing unnecessary waste in your household spend is also underestimated as a way to boost your disposable income and relieve pressure on budgets.
You have probably paid tax on every penny you spend on bills. If you are giving 20% of your income to the taxman that means you have had to earn £1.20 for every £1 you spend on bills. Reducing any waste in your budget is often easier than negotiating a pay rise – but many people don’t know where to start.
It can be useful to start by taking a look at exactly how much you actually spend on different household expenses. Luckily, online tools like Money Dashboard will do the hard work for you and break down your spending instantly.
Research consistently shows that households can save hundreds of pounds every year if they use price comparison websites to find better deals. Sites like USwitch, Compare the Market, or Moneysupermarket are a good start.
How to save money on gas and electricity bills
Gas and electricity is probably one of your largest household costs. Many people could save money by switching but are put off by what they see as a hassle, or are worried that they will lose supply during a switch.
The reality is that switching suppliers is much easier than you think. There are even companies now who will take the whole process of switching out of your hands and always find you the cheapest deal, and switch you automatically – like the company Look After My Bills.
There are also plenty of clever ways to save energy like simply reducing your heating slightly. This can reduce your spend by much more than you’d expect. For example, reducing heat by 1°C will cut around 10% off your heating bill. Wash your clothes at 30° degrees instead of 40° and if you do that for a year, you’ll see a difference in your bills too.
Another tip: replacing lightbulbs with the most energy efficient ones can be a bit pricey at first, but will save you electricity and money in the long run.
When you are thinking about how to save electricity at home, don’t forget that you can ask your supplier to give you a smart meter. It will help you see how much energy you are using in real time and better track usage. Many people find that this helps them cut out wastage by using certain appliances less.
When you need new appliances, look out for A+++ energy efficient appliances. A new A+++ fridge could save you over £100 a year versus your old inefficient one. Likewise, new boilers will be much more efficient – but they’re expensive so only look into this if your old boiler is on its last legs.
If you are thinking about insulation, installing a heat pump or a source of renewable energy (such as solar panels) don’t forget to see whether you can get a Green Homes Grant Scheme voucher.
Saving on Broadband
When it comes to finding the best deal on your internet, phone or TV package, comparison sites are your friend. Although, if you have a contract with your current supplier, and if the terms aren’t up, they may charge you for switching.
But assuming you’re all ready to go and you’ve found an amazing deal on a comparison site, then switching can take just a few clicks. It may involve a visit from an engineer if you are changing supplier, but there should not be any gap in your service.
Just before you sign up to that new deal, don’t forget to call your current supplier to tell them that you are leaving. Often, they will try to match the deal you found. That can actually be the quickest and easiest way to reduce your spend.
One final note of caution, choosing broadband on cost alone can be risky. When things go wrong, you are going to value good customer service—especially if you are working from home.
Smartphones make it easy to check how many minutes of calls, texts and how much data you actually use – but if you have trouble with this, just ring your supplier and they should be able to help you.
This is important because if you use less or more than your contract allows for, you could be paying too much. Worst case scenario is that your contract data allowance is too small and you are routinely paying for extra data – that is the most expensive way of getting data – stop it now!
If you are out of contract, or coming to the end of your contract, then shopping around for a new contract could make a lot of sense. Once you know your call, text and data usage, you can check you are still on the best contract.
One great trick is to switch from a plan which included a free (or low cost) phone to a sim only plan, using your old phone. Contracts which include a phone just spread the cost of the phone over the term of the contract – usually 24 months. So sticking on that plan after it is up is pure madness.
A quick look at price comparison sites can arm you for a bit of negotiation with your current supplier. They will be keen not to lose you and can often magically produce a better deal if you select the ‘thinking about leaving’ option. Don’t be afraid to negotiate – they are used to it and will be happy to make you an offer.
Also if you and your partner or family are all on separate phone contracts, you might pay a lot less if you go on a family / couples deal.
Time is money
Finding the best deal is now so much easier than it ever was. You can get a deal on almost anything – it only takes a bit of time, research and life admin.