The Ultimate Guide to Cutting Costs

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With millions of households overpaying for a whole range of household bills such as energy, broadband, credit cards and mobile, when was the last time you checked to see if you could save money?

Why? Because you could save £1,000’s leaving you more money at the end of every month so spend on things you really want to.

Let’s start with household bills


Gas and electricity

Potential savings = up to £500 a year

Remember that all providers are selling the exact same product - the only point of difference between them is how much they charge - so look around for suppliers offering better deals. In addition direct debit customers could save as much as 5-10% so it's worth exploring whether simply changing your payment method will save you some cash.

Compare energy suppliers today here.

Home phone and broadband

Potential savings = up to £200 a year

This is a very competitive market and providers are usually desperate to keep you as a customer so you can usually bag a better deal by haggling. Still paying more than £20 a month for home phone and broadband? Then it’s time to shop around.

Compare broadband providers here.

Water

Potential savings = up to £200 a year

Ofwat suggests that 46% of customers in England and Wales who have a water meter pay, on average, £100 less. In addition there are lots of easy ways to cut water consumption and save money.

To help you here’s 100 ways to save water.

Council tax

Potential savings = up to £500 a year

The rules are the rules, and there’s not much of a saving to be made on council tax unless you’re in the wrong tax band - a mistake that’s costing people in the UK as much as £500 a year. Check to see if you’re paying the right amount here.

Food shopping

Potential savings = up to £1,000 a year

Shopping little and often rather than doing one big grocery shop will help you to match supply to demand. Write lists and meal plans, choose generic supermarket brands, and look out for discounted items that are near their sell-buy dates.

Another simple way to save cash on your food shopping is to use the MySupermarket website. It's very simple - fill your shopping basket with the items you are planning to buy and MySupermarket will work out which supermarket is the cheapest. It then takes you through to that supermarket's online checkout.

Get tough with direct debits and standing orders

Potential savings = up to £250 a year

Many households waste £1,000s paying for products and services they don't need or ever use. So whether it's magazine subscriptions, gyms, dating sites or paid TV, get tough and cut what you can. Start by reviewing your bank statements regularly to see what you’re paying for.

Remember to make the most of your employee benefits. Most workplaces offer vouchers for big supermarkets, discounted gym memberships, and more.

Next up, cut the costs of your debt


Credit cards

Potential savings = typically £150 per £1,000 of debt

Paying credit card interest? STOP. Consider moving your your existing balance to a 0% balance transfer credit card. Not only will this slash your interest payments, it also means that every penny is going directly towards paying off the debt. Alternatively, switch to a credit card with the cheapest rate available to you.

Compare credit card providers here including an eligablity checker to find the cards you’ve the best chance of getting.

Avoid the minimum repayment trap

Potential savings = depending on your balance £1,000’s

Unlike mortgages and loans, with credit cards you choose what you repay. The more you pay, the faster the debt disappears. The only restriction is the prescribed minimum repayment, (the lowest amount you must repay each month to avoid a fine). The minimum payment isn't a fixed amount – it's usually a percentage of the balance. Card providers show you the minimum repayment hoping you prefer the look of that lower number instead of paying off more of your balance. This lulls you into longer payback periods and allows your provider to charge you interest for a longer period of time.

Learn how to beat the minimum repayment trap to save money on credit card debt.

Personal loans

Potential savings = £100’s over the lifetime of the loan.

Consolidating multiple debts into one, new and cheaper loan can reduce debt stress, reduce your monthly outgoings, and save money on interest over the entire loan period. Doing this effectively will mean carefully ensuring any new loan has the right terms, our quick-read ‘Get Debt-Free Guide’ will help you with this.

In addition see how much you could potentially save with the Neyber loan eligibility checker. It’s quick, won’t impact your credit score, there’s no obligation to use us and we won’t tell your employer.

Try our debt consolidation calculator to see if you can save money with Neyber

Mortgages

Potential savings = up to £1,000 a year

Finding the right mortgage or remortgaging (switching your mortgage to another provider) could save you £100’s each month. But it can be complicated. Try our tips on how to know if remortgaging will save you money for info on when you should/shouldn’t consider remortgaging.

Find the right mortgage for you and compare mortgage rates here.

Unauthorised Overdrafts

Potential savings = up to £1,000 a year

Many banks charge for the ‘luxury’ of an overdraft. If you use one or go beyond the agreed limit, penalties can be pretty hefty. Under new rules, all banks must warn current account customers when you’re about to go overdrawn and give you a few hours grace period to pay funds back into your account and avoid charges. Download your banking app to get live updates and avoid overdraft costs.

Lastly, cut down your personal bills


Mobile phone bill

Potential savings = up to £300 a year

Just like broadband, there’s fierce competition within the mobile phone market. You could save up to £300 a year by switching provider. Not looking to move? Don’t be afraid to try to haggle down the cost of your mobile contract. If you can afford it, remember, it's often cheaper to buy the handset out-right and pay less for a monthly contract.

Compare the latest mobile phone deals.

Car insurance

Potential savings = up to £200 a year

Premiums are expected to hit a record high this year, averaging £900 a year. Now more than ever it pays to shop around for the best deal each year.

Get a quote and compare car insurance deals today.

Also read Neybers 12 ways to cut your car insurance costs for tips like; changing your payment method, opting for a black box/telematic policy which monitors your driving, or simply switching to a cheaper provider.

Breakdown cover

Potential savings = up to £100 a year

Review your policy and assess whether you need every feature you’re paying for; it might be that opting for a more basic package saves you some cash. Alternatively, if you decide that you can’t live without any of the features - consider switching provider. When it comes to breakdown cover, the best deals are usually offered by the smaller competitors who are trying to lure you away from the obvious choices.

Compare breakdown cover providers in minutes.

Home insurance

Potential savings = up to £150 a year

Like car insurance it pays to shop around. Opting for a combined buildings and contents policy will often earn you a discount from an insurer. Be wary of add-ons such as home emergency and legal expenses cover – these are unnecessary for most people.

Get a quote and compare home insurance deals today.

Life insurance

Potential savings = up to £1,000s over the term of policy

The only real way to make savings here is to ensure you’re not paying for more cover than you truly need. Work out how much life insurance cover you need, then compare what you’re currently paying. Armed with this information you’ll be best-placed to haggle with your existing provider or start the hunt for a new one.

Compare life insurance deals and get a quote.


Boost your savings with these alternative cost-cutting budget methods


The 5:2 diet

Take the principle of the traditional 5:2 diet, where you eat normally for five days and fast for two - and apply this to your spending. You can put the money you save on your fasting days towards your savings pot for the future, or a rainy day.

  1. Set a daily budget and only spend this amount for five days a week
  2. Go on a spending ‘fast’ (diet word for ‘spending freeze’) for two days of the week
  3. Calculate your savings at the end of each month by dividing how much you spent by the number of days in the month. Compare this to your previous levels of spending for the motivation to carry on – you should be saving roughly 8x your daily budget a month.

Read all about how one of our team got on trying this method, 'What I learnt from the 5:2 diet'.


The Envelope Budget

Credit and debit card spending can lead to us making purchases without thinking them through. The envelope budget forces us to visualise our spending by sticking to cash rather than numbers on a screen. That way we can physically see how much we’re spending and, more importantly, what’s left.

  1. Work out how much money you have left after paying essential bills
  2. Work out a budget for the remaining categories like; food shopping, socialising etc.
  3. Divide the cash for these categories into their own envelope. Once the money is gone, it's gone - you can't overspend if you don't have that money at your disposal.

There are some benefits and drawbacks to going cash-only, read about the full envelope budget.


A final word on debt-help

No debt is so big that it can’t be sorted.

You’ll find more information about debt at the Money Advice Service: www.moneyadviceservice.org.uk.

PayPlan’s online services include free, confidential online chat with debt help experts, a debt help request form, and a wealth of online resources: www.payplan.com

StepChange Debt Charity: StepChange Debt Remedy provides you with the expert advice, budget support and solutions to help you manage your debts: www.stepchange.org