According to the ONS, average household bills in the UK are around £1,500 per month for utilities, insurance, and mortgage payments, with costs set to rise further.
Minor adjustments when it comes to things like groceries and homeowners’ insurance can help you save a small portion on your monthly spending, helping you avoid needing to borrow money to cover the shortfall. On the other hand, rent, mortgage, and vehicle payments are big-ticket expenses that demand more effort but can result in a significant budget gain.
Here are some tips on how to cut household bills and save money on your monthly spending.
First off, utilities and mortgage bills are unavoidable and will probably make up the largest part of your monthly bills. These types of regular expenses should be treated as recurring and priority expenses. Paying your bills late can result in additional fees and damage your credit score.
In order not to forget about your monthly bills, set a reminder every month and try paying everything on the same day if possible. Also, try to pay your bills a couple of days before the deadline to avoid late payments and charges. You should also try and budget when it comes to your monthly expenses so you are aware of how much you will regularly need to cover your bills. This will help you avoid needing, for example, to borrow £500 for a utility bill.
Don't let money get away from you. Instead, create a daily spending account with its own card and deposit your weekly disposable income into it. You can start by implementing different budgeting strategies to locate the one that works best for you. Some common types of budgets are:
According to Nationwide's Payday Saveday survey, one in five people spend more than half of their extra monthly earnings within 48 hours of being paid, putting pressure on their regular family budgeting.
Before you begin spending, prioritise your most important outgoings and set aside some money for savings. That way, you'll know exactly how much disposable income you have for the rest of the month.
Look over your salary to determine your take-home earnings. Your take-home pay is what's left over after your company deducts taxes, insurance, and National Insurance payments. You may start to break down and split the cash more precisely after seeing how much money you actually receive each pay period.
By setting up a direct deposit from your paycheck into your savings account, the money automatically transfers to savings each payday without requiring thought. For starters, you can automatically transfer 10% of your monthly income to savings.
Purchasing your house and auto insurance from the same provider is another money-saving strategy. When you purchase many policies from the same insurer, you can take advantage of this option known as "bundling" and receive a discount.
Benefits of bundling your insurance can include:
Mortgage and rent payments usually consume the most significant part of your budget. Decreasing these costs can help you cut household bills and save money.
You might be able to reduce your monthly interest rate by refinancing your mortgage. A couple of percentage points off your interest rate can save you hundreds of pounds per month. Check your credit to ensure a better rate is available, then shop around and compare rates and fees from multiple lenders.
Moving your family from a three-bedroom apartment to a two-bedroom apartment could result in hundreds of pounds in rent savings every month, depending on the city. For example, in London, you will likely spend a greater proportion of your income on rent or mortgage payments compared to other parts of the UK.
You may be living alone in a small studio apartment and spend more than half of your salary on rent. You can upgrade to a larger apartment and pay less rent if you share it with a roommate.
If you can't move, negotiate terms with your landlord. They might agree to lower your rent in return for a longer lease or the ability to handle your own repairs.
Utilities are typical household bills and are an excellent way to search for instant savings. Small changes, such as adjusting your thermostat or enrolling in automatic payments, can develop into significant savings.
Similar to insurance, utilities can also be bundled. Some utility providers will offer you a single contract that includes both electricity and natural gas plans for your home's energy needs. Many energy providers give benefits to customers who opt to bundle their utilities, including promotional rates, promo coupons, gift cards, and other reductions.
This can also mean fewer bills. Picture getting your electricity and gas bills on the same day or at the same time. Ultimately, a single bill that details your energy usage and enables you to pay for the two services simultaneously.
When you bundle your TV and Internet services with the same provider, you can usually save money. If you do not work from home or need high-speed internet for significant use, you can also save money on the Internet by switching to a lower-speed tier, which will cost less.
Lowering the temperature at night or while you're away can help you save money on your heating bill and is another way to cut household bills.
A smart power strip, which turns off power to devices that are not in use, can help you reduce your average cost of household bills for electricity. Also, consider requesting an energy audit from your utility company to gain household-specific information.
Food is another major category in an average family’s budget. Try cutting down on some items or replacing them with more affordable options. Here are some tips on how to do that:
Take some time and calculate how much you spend on different memberships for your household. Cancelling some or finding cheaper alternatives can reduce your monthly spending.
Finding one subscription plan that serves several purposes will help you save money in the long run. Members of Amazon Prime, for example, get unlimited streaming and free shipping, as well as potentially free delivery on Deliveroo.
Popular music streaming services like Spotify and Apple Music also have family plans that allow numerous people to share a single account while saving money.
There are a lot of suppliers out there for mobile services that you can negotiate for a better deal. Try to match your lifestyle to your plan so that you don’t pay more than you use.
Check with your mobile phone and network provider to see if a less expensive protection plan is available. Standard insurance may offer adequate coverage and is frequently less expensive than premium options.
Dining out at fancy restaurants or taking your children to three different sports won’t help you cut your household bills. Instead, there are multiple cheaper or free entertainment options you can find as much fun in as more expensive activities. Here are some examples: