By Chris Torney
Prime Minister David Cameron has recently warned that the UK faces drastic public spending cuts that will disrupt Britain’s “whole way of life” for years to come.
Tax increases and reductions in the services currently offered at no cost by councils and central government are necessary, Cameron says, to cut the country’s record debt levels and ensure the UK comes out of the current economic crisis stronger.
However successful this strategy proves, families will inevitably have to tighten their belts and get used to living on less.
That’s why we at Confused.com have come up with a few pain-free ways you could improve your finances right away, to help you prepare for the Budget later this month and more government-backed austerity measures further down the line.
Get things for free
It’s great if you can afford to buy all your household goods brand new, but if you don’t mind the odd second-hand item there are a number of online services that let people swap or give away old or unwanted products to others in their area.
Freecycle is one of the best-known examples: the site says its aim is to keep as many unwanted items out of landfill as possible.
All you have to do is sign up to the Freecycle group in your area, and you’ll receive an email whenever another group member has something they want to give away – it could be anything from a child’s bike to a sofa or washing machine.
You can advertise your own unwanted items too.
Cancel old payments
Setting up Direct Debits to make regular payments such as gym memberships or magazine subscriptions is convenient – but are all these outgoings really necessary?
Research has repeatedly shown consumers commonly fail to cancel Direct Debits until long after the service they’re paying for has outlived its usefulness.
Get in touch with your bank or check your account online to see what’s coming out every month, and decide whether there’s anything that could be cut without too much distress.
Claim what you’re owed
The government might be planning to cut back on benefits and other spending, but for the time being at least there is a lot of money available from the state that people simply fail to claim.
Take-up of pension credit – a top-up to the basic state pension available to millions of older people – is particularly poor. It’s quite simple to check whether you or an older relative would be eligible for the cash – you can do so on the Directgov website.
There is a bit of form-filling to make a claim, but don’t let this put you off.
The Directgov site also has details of the payments available to families such as tax credits, although the government is expected to scale this scheme back in the emergency Budget later this month.
Take control of your spending
The government is planning to reassess what it spends its money on, and so should you. Spend a few weeks keeping a note of exactly where your income goes, and use that information to draw up a budget. You might be surprised about your spending habits when you see them written on paper.
Budgeting like this means you’re much less likely to splurge on impulse purchases, and you’ll also be able to see if there are any areas you could happily cut down on.
Review your insurance
There are two approaches to ensuring you aren’t spending too much on insurance: one is to make sure you get the best deal by shopping around whenever you buy a new policy or make a renewal.
The other is to check you’re not paying twice for the same cover. You might be surprised at how easy this is to do: for example, you might have been sold insurance for your mobile phone when you last upgraded. But many home contents policies include mobile cover as standard.
Even if yours doesn’t, your home insurance provider may be able to add phone cover on for less than your mobile network charges.
Cut the cost of treats
The economic situation may mean you have to tighten your belt, but that doesn’t mean you have to live like a monk.
There are ways you can save cash on extras such as eating out or taking a weekend break. Search on the internet for “restaurant discounts” and you’ll find countless offers such as buy one meal, get a second free.
You may have to eat during the week or before the evening rush, but it will cost much less.
Similarly, sites such as Lastminute.com have late deals from hotels or tour operators trying to offload unsold rooms or trips.
We all know that feeling when a week before payday you're already out of cash, and often it's the little things that add up and sting us. With our cost calculator tool you can get an idea of how much you might be spending on bits and bobs.
