By Corin Vestey
Most of the money you earn each month probably goes on your home. Ever wondered
how much of that is wasted? If you haven't reviewed your finances for a while
then it could be more than you think.
The three main areas of expenditure I am going to look at are:
1. Your mortgage
2. Your insurance
3. Your energy consumption
Saving money on your mortgage is easy
First, let's look at the big one: the mortgage. For most people the mortgage
payment is the single biggest outgoing they have so it makes sense to reduce
it as much as possible. Interest rates are at forty-year lows right now and
it looks increasingly likely that they have bottomed out.
If rates do start rising re-mortgaging now to lock in a low fixed rate for
five or ten years could be an excellent move. If you have come to the end of
an introductory deal and you are now paying your lender's Standard Variable
Rate (SVR then you stand a very good chance of making big savings by re-mortgaging
– whichever type of mortgage of choose.
The trick with re-mortgaging is to use a no-fee broker. Firstly,
a broker will be able to advise you on whether you will save money by re-mortgaging.
Secondly, they will do what your bank or your building society won't –
search the full range of available mortgage offers for a deal that matches what
you want. Thirdly, a broker will also deal with most of the paperwork and chase
up the new lender if necessary. This takes most of the hassle factor out of
the process and speeds things up for you.
We recommend you use L&C as your mortgage broker
Cut the cost of essential insurance
As the pictures of burnt-out thatched cottages remind us buildings
and contents insurance are 'must-haves'. But that doesn't
mean that you have to pay over the odds for them. Don't just accept your
renewal quote, it is very easy to shop around these days and you could get a
discount of up to 20% for buying online.
Don't forget to make a proper attempt to value the contents of your house.
Vast numbers of people are underinsured and this could lead to heartbreak in the event of a disaster. It is better to err on the side of caution when
estimating the insurable value of your goods.
As ever, remember to check policy documents thoroughly and compare any current
policies with new ones to ensure that you are will be get the same level of
cover or better. Don't leave yourself uninsured by cancelling your old
policy before your new one is in place.
Use our search wizard to find the cheapest insurers
Energy efficiency and cutting your bills
As we all know, gas prices have soared over the last year and higher energy
costs are probably here to stay for the foreseeable future. Water prices also
now look as if they are going to rise and while the Treasury hasn't actually
admitted to any plans to levy a charge on lung use in a built-up area it can
only be a matter of time. All these threats to your finances, real and imagined,
mean that cutting your bills back should be a priority.
There are two ways to do this. For maximum savings use them both. The first
is to switch to a cheaper supplier, or a cheaper tariff (such as a duel fuel
tariff) or to take advantage of any available discounts – such as for
paying by direct debit etc.
The best place to research the available savings for your personal circumstance
is through our best buy recommendations here.
Use energy more efficiently to slash those bills
The other way to reduce the cost of living is to use less energy and water in
the first place. This is much easier to do than some people think and can actually
get quite addictive, plus you can feel virtuous because you've done something
for the environment.
For those on lower incomes grants are available from local and central government
to subsidise energy efficiency. You can find out more about these at www.est.gov.uk
or you could try the website of your local authority for further tips and help.
I've got two checklists for you. One list for energy saving and one list
for water saving. Some of the tips won't actually save you very much but
could do a lot for the environment if everyone starts doing them.
Find
out how much you could save
Save as much £494 a year on energy
1. Install loft insulation 10 inches thick and you could save £140-£170
a year
2. Install cavity wall insulation and save £100-£120 a year
3. Replace an old boiler and save £80-£90 a year
4. Buy energy-efficient fridge freezers and washing machines (save £35
a year)
5. Turn your thermostat down a degree and save £30 a year
6. Insulate your hot water tank with a jacket and cut your bills by £15
a year
7. Install energy saving light bulbs and save up to £7 a year
8. Filling and using low settings on washing machines/dishwashers can save £2.50
a year
9. Turn appliances off standby to save around £25 a year
Nine to save money by using less water
1. Don't fill the bath completely.
2. Take a shower instead of a bath
3. Don't use the dishwasher or washing machine half-empty
4. Use a bucket or watering-can not a hosepipe
5. Don't run the tap when brushing your teeth
6. Don't flush the loo at night (if you don't really have to)
7. Put a 'hippo'
or other device in your toilet cistern
8. Collect rain water with a water butt for the garden/car
9. Use a washing-up bowl instead of running the tap
