Many Brits will be feeling the pinch this year as the recession continues to wreak havoc with the economy.
The good news is there are a number of steps you can take to ease the burden on your over-stretched budget.
We're not talking about cancelling the family holiday or moving to a smaller house.
Rather, these are simple changes that will have a minimal impact on your standard of living, but a dramatic impact on your monthly bills.
1: Switch to an online energy tariff
If you're looking to cut your energy bills, switching energy suppliers is a good place to start. Not only will it save you money, but it'll also send a clear message to your supplier that you aren’t willing to put up with their prices.
Unfortunately, with suppliers changing their tariffs so often, this does not always result in a long term saving. To achieve this you need to choose a supplier’s
online tariff and pay by direct debit. Studies show this can shave as much as 20% off your bills.
As a final note, if you are looking to switch tariffs, be sure to avoid locking into a fixed rate deal. While these may be a good idea when energy prices are on the rise, suppliers are expected to cut their rates by as much as 15% in the coming months, something those on fixed deals will miss out on.
2: Avoid interest on credit cards
The average APR on credit cards is now an astonishing 18% - that's 12 times higher than the base rate.
In order to avoid racking up interest at a rapid rate, switch your existing debt to a 0%
balance transfer credit card.
Currently, the longest balance transfer offer on the market is 16 months with the
Virgin credit card. Note that you will have to pay a 2.98% transfer fee, but you'll still end up saving hundreds of pounds.
Alternately, if you have upcoming expenditure that you plan to put on your plastic, opt for a 0% new purchase credit card instead.
3: Shop around for financial products
It may not be fun, but taking the time to compare different providers can save you hundreds, if not thousands of pounds each year.
For example, research from price comparison site Confused.com shows that you will save an average of £208 by
shopping around for car insurance.
4: Take advantage of online discounts
Speaking of insurance, you can reduce your premiums by as much as 25% by taking advantage of online discounts.
Insurers often prefer selling their cover this way as it means lower overheads for them, and some of this saving is passed on to the customers.
You can reduce your premiums further still by paying for your policy annually rather than monthly. If you don't have enough money to do this, you could put it on a new purchase credit card and pay it off gradually .
5: Make use of discount vouchers
The difficult economic time has led to a sharp rise in the popularity of discount vouchers by people from all walks of life.
And it's not hard to see why – with budgets being stretched to the limit, the opportunity to save as much as 50% on purchases is extremely appealing.
Whether it's a “buy one meal get one free” deal at Zizzi's or 25% off at Hamley's, there are literally hundreds of discounts to choose from.
Sign up to sites like www.myvouchercodes.co.uk and you can get updates on the month's most popular offers.
Of course the golden rule with “discount” shopping is that it’s only a good idea if you’re buying goods you had to buy anyway – there’s little point in saving 20% if you spend 30% more in the process.
6: Switch broadband providers regularly
Broadband deals are getting cheaper all the time. That means if you signed up to a contract a few years ago and haven't changed since, you could be paying up to three times more than necessary.
So make sure you
switch suppliers whenever your existing deal expires – as always, taking time to compare the different deals on the market.
As a final point, make sure you take the time to read the contract carefully. Research found that one in four broadband users are hit with unexpected charges of £36 a year because they didn't understand the terms and conditions.
7: Get a cheaper mortgage deal
The credit crunch and general market volatility caused mortgage rates to rise sharply last year.
Thankfully, lenders are starting to respond the repeated cuts to the base rate, and there are a number of attractive deals on offer. Unfortunately, the best rates are limited to those who already own at least 25% of their home.
Contact a mortgage broker to see if you could shave hundreds off your mortgage repayments.
8: Switch current accounts
Did you know that the vast majority of high street bank accounts pay just 0.1% credit interest? With the cost of living so high, it's essential you make the most of any spare cash you do have.
Consider switching to a higher paying current account – Alliance & Leicester's Premier Direct account comes with a 6.5% rate on the first £2,500.
Alternately, if you often slip into your overdraft then you need to find one that charges you less for doing so. Take a look at our best buy low overdraft accounts
here.
9: Don't overpay on your mobile
The average mobile user leaves 100 minutes and 73 texts unused every month. That means you’re spending around £72 a year more than necessary on your contract.
Think carefully about how often you use your phone before selecting your contract. For those already signed up to one, call your provider at the end of each month to see how many minutes
and texts are leftover.
That way you will have a clear idea of what you’ll need when it comes time for a new package.
10: Draw up a budget
The final money saving tip is to get a tighter grip on your finances. Many of us waste loads of money each month simply because we don't know exactly what we're spending it on.
Draw up a detailed budget (read more
here), then use it to identify where you can cut costs, remembering to focus on both your essential monthly outlays and luxury purchases.
