How can you cut the cost of your outgoings?

All sorts of industry groups and government officials, including the Governor of the Bank of England, Mervyn King, and the Chancellor of the Exchequer, Alistair Darling, have warned that consumers in Britain have a very tough time ahead of them in terms of their finances. Household finances amongst families in the UK have been seriously compromised due to a wide variety of rising costs, and this has left many really struggling to make ends meet.

Things were bad enough when the interest rate kept going up between August 2006 and July 2007, which left many homeowners struggling to keep on top of mortgage repayments. However, whilst the interest rate did start to come down towards the end of last year household finances were hit with a myriad of other rising costs, which counteracted any positive effect from the rate cuts. This included soaring energy costs, with energy firms now having hiked up prices twice this year alone, rising water costs, soaring food bills, and rocketing petrol prices.

This is why it has become more important than ever for households to try and reduce their outgoings and make their money really work for them, as many could otherwise find themselves being tipped over the financial edge. Whilst it can be difficult to find ways to reduce the amount that you are paying out each month there are some hints and tips that could help you to save money, and it is worth implementing any that could help you to make savings, no matter how small the saving may appear to be. It is important to remember that every little helps, and with a few simple changes you could find that the savings start to add up.

• Cut back on the cost of your water bills: Like other bills water rates have gone up recently, and some families could find that they are paying over the odds for their water. You may find that a water meter is a far better option and works out far cheaper, especially for smaller households that do not use as much water. Do a little research to see whether you could save money on the cost of your water.

• Look at alternative energy providers: All of the big six energy providers have now hiked up their gas and electricity prices for the second time this year, and many households have seen their monthly bills rocket. It is well worth using one of the various price comparison sites in operation to see whether there is another provider that covers your area and could provide you with cheaper energy bills.

• How often do you use your mobile? Many people have a contract mobile phone even though they do not use the phone very often. If you contract is coming to an end and you do not really use the phone all that much you should consider whether it may work out cheaper to opt for pay as you go rather than paying for a contract.

• Do you need to make calls on your landline? Many mobile phone deals offer hundreds of free minutes, and a large number of people use their mobiles in place of their landlines as a result of this. Consider whether you actually need a landline, as it may be pointless if you make and receive all of your calls on your mobile. Or you could consider having a landline for incoming calls only so that you are not tempted to use the phone to make calls.

• Shop around for home insurance: It is important to have home insurance in place but it is also important to ensure that you are not paying over the odds for your cover. Do a little research and compare home insurance deals from a range of providers to see if you can get the same level of cover for a much cheaper price – you will be surprised by how much the cost of cover can vary.

• Try and cut the cost of your broadband bundle: If you are one of the many households that has a broadband, television, and landline bundle you may find that there are savings to be made here. Check out the broadband speed and television package that you have and consider whether you actually need the speeds and channels that you are paying for. If not, then consider dropping down to a lower speed and a more basic television package to cut your bills.

• Shop around for your shopping! These days the discount stores such as Aldi and Lidl offer a greater choice of products often at far cheaper prices than the major supermarkets. See if you can get into the habit of getting as much of your shopping as possible from these discount stores, and then getting the remainder from the larger supermarkets.