Top tips for cutting costs in the New Year
Sunday 02 January 2011
The streets are littered with the remnants of Christmas – browning pine trees and binbags bursting with tinsel and shredded wrapping paper.
But as festive memories begin to fade, the financial pain from the annual splurge is just about to kick in. The average Briton spent more than £400 on presents alone last year, so the finances of many people are pinched, but the new year is the perfect time to cut costs and boost income using a few simple techniques.
Reduce mortgage costs
Kevin Mountford, the head of banking at comparison site Moneysupermarket.com, says switching to a mortgage provider with a rate even just a fraction lower than an existing deal can result in a sizeable annual saving. "Homeowners should ensure they are getting the best deals possible. Even a small difference in rate can greatly affect the overall monthly mortgage payment," he says.
Switching a £150,000 mortgage from the average standard variable rate of 4.7 per cent to the two-year fixed rate from Santander at 2.65 per cent would, he calculates, save £2,040 annually.
Switch your balance
Left unchecked, credit cards are notorious for spiralling out of control, crippling the financial circumstances of those that use them and hampering the economy.
Now is the time to switch any debt on a credit card to a balance transfer card – one that charges 0 per cent interest for a fixed period – and use that time to eradicate debt once and for all. By switching £2,000 in debt on a card with an average APR of 17.32 per cent to the Virgin Credit Card, there would be no interest to pay for the first year. This gives an annual saving of £301.85, taking into account the balance transfer fee, says Moneysupermarket.com.
The easiest way to make savings on electricity and gas is to move to a dual-fuel, direct debit – by switching to the best online tariff instead of staying on the average standard QCC tariff. This can save an average of £258 over 12 months. A simpler way to cut costs is to turn the thermostat down 1C, saving 10 per cent off your bill. Insulating lofts and open spaces can help cut up to 35 per cent of heat loss, according to Moneysavingexpert.
Inflate your income
The simplest way to boost your income is to switch to a current account that offers a higher rate of interest. The Santander In Credit current account pays interest of 5per cent on credit balances. Keeping a £1,500 balance in this account for 12 months would generate £75 in interest.
Another way to increase income is to keep a running budget analysing household income and expenditure on a week-by-week basis. Keith Thomson, the director of investment services at Dundee-based Blackadders, says this helps prioritise what is and is not essential, helping eradicate unnecessary expenditure which gobbles up income.
"Most people only have a vague idea of what they spend. Keeping track of all expenditure, especially cash – for newspapers, lunches, drink etc – will give you a clearer picture. It should help identify where money can be saved for unexpected bills, and you can still enjoy little luxuries."
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Jeremy Clarkson 'sees no problem' with his racist language on Top Gear, says BBC
- 2 'Alien thigh bone' on Mars: Excitement from alien hunters at 'evidence' of extraterrestrial life
- 3 Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
- 4 London restaurant 34 creates champagne glass modelled on Kate Moss’ left breast
- 5 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Disgusting, frustrating, but intriguing: how the country really feels about its politicians
Bin bag full of cats' heads discovered near Manchester's Curry Mile
iJobs Money & Business
£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...
£20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...
£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...
£55000 per annum: Harrington Starr: A financial software vendor at the forefro...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony