How can I reduce my household expenditure?

Summary: This article aims to provide tips on lowering monthly household expenses.

Summary: This article aims to provide tips on lowering monthly household expenses.

Set a budget.

The first step to ensuring that income covers all outgoings is to set a monthly budget for food and household items, clothing, eating out and so on. Assessing income versus essential expenses such as rent/mortgage, bills, insurance etc will show how much disposable income is available. This can then be divided into a food budget, savings budget and a budget for anything else. By sticking to this, then the individual will be less likely to overspend.

Switch energy provider.

There are a number of comparison websites online that can help find the best deal, but even if the current provider is competitive, it may be possible to reduce an energy bill just by changing the tariff. While it can be very confusing, it is always worth contacting an energy provider to ask what their best tariff available is. There may also be discounts for managing an account online or having both gas and electricity provided by the same company.

Reduce fuel costs.

Everyone is aware of how much fuel has increased in price over the last few years with the average tank of fuel costing in the region of £70+, so it is important to conserve it as much as possible. Where possible, walk or cycle short distances which has the added benefit of increasing health and fitness. Don't have a heavy foot! It is not a race to get away from the traffic light, but being over enthusiastic with the accelerator will deuce fuel efficiency dramatically. Ensure tyre pressure is correct. If it is too low, then it will also lower fuel efficiency, as will a lot of weight in the car, so keep it light.

Change grocery shopping habits.

With the growth in 'budget' supermarkets like Aldi or Lidl, there has never been a better time to reduce the weekly food bill. While some of these low cost shops may have a limited range of goods when compared to the major supermarkets, the majority of essential food items can be bought their and can massively reduce the weekly shopping bill.

Lower insurance costs.

Both car and home insurance providers will often give fantastic deals to new customers, so it is always worth shopping around at renewal time, especially as after the first year is up, costs can begin creeping up rapidly. In some cases, home contents insurance (as an example) may be reduced by more than 50% by switching. It is important to always check the small print to ensure the cover is adequate.

By lowering expenditure and sticking to a budget, it will make dealing with finances far ever and reduce the risk of becoming insolvent (income is not enough to cover essential expenditure) and the possibility of having to enter a debt solution such as an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DMP).