Trying to keep the household costs down

OK, a follow on from my previous budgeting blog post. How exactly can you reduce the monthly outgoings on your household bills?

1 – Shopping

There are a couple of potential ways to tackle this one. I will suggest some, but there may well be others.

The way it works in my house is this: Firstly we use a fortnightly meal plan. Just a piece of paper with the days of the week on, and then I write a meal for each day.  This works brilliantly for me, as my biggest problem has always been deciding what to cook for the evening/main meal. This way it’s already decided, so I just look at the planner the night before and take out whatever I need meat wise from the freezer to defrost.  It also means, when I do the shopping I only buy what I need, as I’ve already decided what ingredients I will need for the next fortnight. We have far less takeaways this way too!

I have a weekly budget for my household shop. For us (one adult, one teen and one child) that is £70. This includes EVERYTHING that the household might need (cleaning products, shampoo etc and food). I tend to do the shopping fornightly (see above), so that gives me £140 to spend each fortnight, I never go over.  Some weeks may cost more than £70, you know those weeks where everything runs out AND you need washing powder AND toilet rolls etc, but others cost way less. Overall it balances out pretty well on a fortnightly basis.

Going fortnightly also means less impulse buy opportunies, half in fact!

Online shopping can work out cheaper, even if you are paying for delivery. You can see all the offers clearly, and have plenty of time to compare the prices of different products. It also removes the temptation of walking past something you really don’t need but jumps into your trolley anyway, or suddenly appears out of no-where on the conveyer at the checkout! However you do miss out on the reduced sections found at the supermarket.

Reduced sections are great, and work really well with a meal plan. Buy the meat on offer and freeze it as soon as you get home. When you make your next meal plan, check what you already have in the freezer and use that up first. It might be ‘use by’ today, but if you are freezing it right away it’s good to go!

2 – TV, Broadband and Telephone

Check that you really need what you’re paying for. Can you reduce the bills at all? Perhaps with less channels or less data on your internet. Try calling your provider and seeing if there is a current discount they can offer you. Threaten to leave if you need to, and do so too. You are bound to find similar or cheaper elsewhere – but you may be more comfortable checking this before you jack in your current provider!

3 – Mobile phone

Check if you are out of your contract period. If you are you can get a much better sim only deal through your current network. If not, check that your plan is suitable for what you are using your phone for and change plans if you can.

If you are on PAYG, shop around for a new network, or product type with your current network. Many networks have deals these days, including free texts with a top up and/or free data. Look at what most of your credit is spent on and go from there.

4 – Utilities

Shop around and get cheaper tariffs if you can.  If you are on a prepayment meter, and can trust yourself to budget (see previous blog post on budgeting), it is far cheaper to switch to a standard meter (although the utility company will make a one off charge for this). For many families, a water meter can offer large savings too.

Reduce your usage where possible. Make sure all your bulbs are energy efficient. Encourage household members to switch lights, TVs and computers off when not needed or the room is empty. Only put the water you need in the kettle each time. If you are gathered in one room in the evening, shut the door to keep more heat in. Make sure your home is as insulated and draught free as you can. Put a heavy curtain over front doors or large windows, for example. Use a water butt to collect rain water, tumble dryer water (if you have a condenser type) and shower water whilst waiting for it to heat up. You can use this water for the garden and washing the car.

5 – Babies and Small Children

Breastfeeding can save a fortune over formula milk. Obviously it may not be possible for you and your little one, but there are so many reasons to give it as good a go as you can if it’s not too late already.

Making your own baby food is another way to save large amounts of money. An inexpensive hand blender and some ice cube trays are all you need. If you are not adding salt, many of your family meals may be suitable to whizz up and freeze. Otherwise use fruits and vegetables as well as some meats once your little one is old enough. Cook without salt and freeze in sterilised ice cube trays. Simply defrost and heat as many cubes as required for each meal in the microwave – taking care to mix thoroughly and check the temperature before feeding. Try ready brek instead of baby cereal too. It’s far less expensive for a much larger box AND doesn’t have any of the additives found in baby cereals!

Re-usable nappies can also save a fortune. They do require a larger initial outlay, but that is a one off payment. Or find a Real Nappy Library close to you.

There are many other ways to keep costs down, these are just a few that are easy to implement.

Budgeting and clearing debts.

I have worked with my own finances and that of my mother in great detail. I helped my mum to get out of the debt spiral she had fallen into and entirely change the way she dealt with her money.  Since then many friends have asked me for advice on how to begin to achieve the same for them, so I thought I would share a few tips. When better to start to get a handle on your finances than the new year?

Firstly, know what your essential bills cost. All of them. Work it out on a weekly basis for everything, whether paid yearly, monthly or otherwise. Include groceries, travel (fuel/car tax/insurance/mot/service/public transport/car repairs) as well as everything else.

Secondly, know what your total income is, from all sources. Again work it out on a weekly basis.

With any luck, the second figure will be the same or larger than the first. If not you may need to look at cutting down costs or increasing income (I will write a blog about this in due course).

Lets say the second figure is larger by £50 a week (or whatever figure it was), you should then allocate a portion of this to savings or paying off debts (overdrafts/credit cards etc). In this example, lets say we’re going to keep £20 a week for that.

Set a particular day of the week, Monday is good, and on that day you will withdraw the remainder of your weekly income (in this example the remainder is £30). That is your ‘extras’ budget for the week. That’s it. No more. The rest is already accounted for, for bills etc.

Have a safe or money box at home, anything left from that ‘extras budget’ goes in there each week, this becomes your ‘extras savings’.

Be strict when doing shopping, take the budget for groceries out each week/fortnight/month and only spend that in the supermarket. Anything left can either go back in the bank for savings, or into the ‘extras savings’ pot.  Some find it cheaper to shop fortnightly instead of weekly, or online instead of instore, either way the same rules apply. Again, I will talk more about groceries budgeting in another post.

Open at least one savings account with your bank, all of your extras left in each week should go in there so you can see it building up.

It depends on the difference between figure one and two, but you may find you have sufficient to ear mark a certain portion of your savings for a holiday or big treat. It’s best to also have a separate savings account for this.

Make sure the weekly portion left for savings or debts is not squandered or used and general spending. If you have an overdraft or credit cards use the extra each and every week to pay a bit off. If you have 4 such debts, each week pay a bit off each (this is in addition to any minimum payments). Or choose the one with the highest interest and clear this first.

Be strict with yourself and your budget. Keep savings separate from bill money. Make sure you factor in yearly bills as well as a reasonable amount for clothing/birthdays etc. Pay what ever you can monthly (unless it will cost you more). Things not paid monthly to the company, pay monthly into another ‘bills’ account if that helps you to keep it seperate.

Do seek help from a debt charity if you are struggling or your income is smaller than your costs.