In need of a little financial revision when it comes to managing your household finances? The best way to make sure you don’t blow your budget is to stick to the general rules of finance and do your sums.
1. Pay less for home insurance.
Many people take out their building and contents insurance with their mortgage lender or broker when they buy their home. It might not seem too expensive until you realise that there is a highly competitive market out there and you could make big savings simply by moving to a better deal. And it’s not hard to do – in fact Confused.com’s new online process makes it quicker and easier than ever.
2. Draw up a budget.
This sounds obvious but so many people don’t keep track of their finances. While they might know what their income is, they haven’t a clue about their outgoings. Don’t fall into this trap. Spend a month writing down everything you spend money on and get a good idea of where your cash is going. Then draw up a budget and stick to it. Sounds simple and it is – plus it’s effective.
3. Develop a regular savings habit.
If you find it hard to stop spending your money, set up a standing order for an affordable amount each month into a high rate savings account. It doesn’t matter if it isn’t a huge sum – saving £40 a month (the equivalent of the cost of gym membership) could see you around £500 better off at the end of the year.
4. Make yourself cut your household spending.
Go for supermarket ‘own brand’ versions of food and goods for two months and see where you can make savings without compromising quality. Also make sure you are getting the best value on your gas and electric – it’s easy to find a better deal and to switch. Plus if you’re currently paying separately, you may find you get a better deal by opting for a TV, broadband and phone bundle.
5. Don’t be loyal to your bank.
Your current account is a key part of managing your household budget and it should be working hard for you. Make sure it meets your needs and if it doesn’t, find an account that does. If you spend a lot of the month in the red, find a current account that offers an interest-free overdraft, such as Alliance & Leicester’s, which charges you 0% interest for the first 12 months. Or if you are usually in credit, the same Alliance & Leicester account pays a whopping 6% interest.
