Close

Household budgeting - where are UK homes wasting their money?

POSTED: 2nd April 2014
IN: Personal Guides
Share:

One of the knock-on effects of the credit crunch and global economic crisis is an increased awareness of financial responsibility and the importance of being careful with money.

One of the knock-on effects of the credit crunch and global economic crisis is an increased awareness of financial responsibility and the importance of being careful with money. 

undefined

A recent report by VisualDNA, revealed in Marketing Week, compared consumer behaviour and spending habits in the US and the UK. It suggested that Brits have taken the recession more to heart than Americans, and are three times more likely to be careful spenders than their counterparts across the Atlantic.

While many consumers have adopted a more responsible attitude in recent years, most people still have plenty of scope for saving money and making cutbacks, if they are willing to take the challenge seriously and make some sacrifices.

So what are the main areas where we waste our money, and how can we change our ways?

Food shopping

We've all been there - you're browsing through the supermarket and your eye is drawn to the special offers and promotions, the oh-so-enticingly packaged treats and snacks that weren't on your list when you walked into the store.

Give in to temptation just a few times, and before you know it a pre-planned £50 shop has passed the £60 or £70 mark.

If you are serious about saving money on your food shopping, there are a number of handy tactics to use.

One approach is to introduce some structure into your shopping habits by making a meal plan and going to the supermarket at the same time every week or month. If you know exactly what meals you will be preparing, you know what you need to buy and how much it is likely to cost. Being unsure about the items you need increases the risk of overspending and buying unnecessary things that could go to waste.

Ensure you stick to a budget by leaving your credit or debit card at home and simply taking as much cash as you are happy to spend. You could even take a calculator with you to make sure you don't exceed your planned spending as you shop.

Home utilities and services

Utilities and services in the home is a big area for money wastage. Many people pay for television packages with expensive sports or movie channels that they rarely watch, but never stop and think about how much they could save every month without these additions.

It is always worth getting in touch with your provider to talk about your contract and how to change it. If you are determined to reduce your package to save money, don't let yourself be swayed. Furthermore, there is always a good chance that threatening to cancel or move to another service could lead to a special offer or loyalty bonus to retain your custom.

Home energy plans and tariffs can be complicated affairs, but it can pay to do some research and compare the deals on offer to see if you could be saving money.

On a related note, ensure you are making the most efficient use of your energy by switching off lights, turning off unused electrical appliances at the mains and turning down your heating when you are out of the house.

Unused luxuries

Paying a monthly sum for a product or service that goes largely unused is a common habit and a major cause of money wastage.

You might like to keep your gym membership active in case you ever feel the need for an impromptu workout, but be pragmatic about it - does the regularity with which you use your membership justify how much you are paying for it?

It is wise to adopt this attitude towards all of your monthly outgoings. Think about the necessity of the expense and whether you are getting good value for money.

This principle also applies to one-off purchases; do you really need that new pair of shoes or the latest electronic gadget, if you already have something similar at home?

Financial products

Sitting down and assessing your financial products could help you save a healthy sum over time.

Are you paying a monthly amount for a premium bank account with additional provisions, such as travel insurance or mobile cover, that you don't really need? Or perhaps you are still using a credit card that is charging a relatively uncompetitive rate of interest, when there are alternative products out there that could save you money.

People who have a number of different debts could consider bringing them together in a single consolidation loan.

This option brings potential benefits including greater simplicity, lower monthly payments and reduced interest, but you should bear in mind that the overall amount you have to repay could end up higher with a consolidation loan.

The content published on this website is intended to provide information only. The reader should seek advice from experts on the subject matter and independently verify the accuracy and relevance of any information provided here before relying upon it or using it for any reason. You can view our terms and conditions here.

Want to read more?

  • Personal
  • Guide
  • Residential Mortgages

Published: