Reducing Your Outgoings
| Site: | CLD Inverclyde Council |
| Course: | Managing Your Money |
| Book: | Reducing Your Outgoings |
| Printed by: | Guest user |
| Date: | Saturday, 23 November 2024, 2:55 PM |
Reduce your outgoings
Now that you have completed the budgeting tool you will know which of the following is true for you
1) Your income is more than your outgoings ?
OR
2) Your income is less than your outgoings ?
Regardless of which one of the above are your results the next steps are the same. The goal for you is to reduce your outgoings where possible. Look at each of your outgoings and think about how you could pay less or for each of them.
Start at the largest amount. For most people this will be rent or mortgage.
Accomodation Costs
If you are renting would it be possible to move to another property that costs less each month?
If you have a mortgage can you get a better rate? There are lots of mortgage comparison sites online to let you see what is available. You can see more information on comparison websites later in the course.
Do you have a spare room? You can rent out a spare room tax free up to £7500 per year. If you rent your property you will need your landlords permission to rent a room.
Utility Bills
This includes gas, electricity, water, mobile phone, TV and broadband.
There are many different suppliers of utilities and you can easily check the costs of these on comparison websites and then switch to get better value for money.
The amount of gas and electricity you use can also be reduced. There is lots of advice online but in Inverclyde you can get help from an energy advisor for free (energy advice section later in this course).
Food cost
Good quality, health food is vital to keep us well nourished and full of energy for life. It doesn't need to be expensive to buy this type of food. Food Waste: In the UK the average family of 2 adults and 2 children waste approximately £800 per year of food. This is good food that is thrown away. Wasting food not only costs us money but also has an environmental impact. Food waste in the UK creates greenhouse gases equivalent to 3.5M cars! You can reduce your food waste and save money by doing the following Before you go shopping plan out what meals you are going to have this week or the next few days. Check what ingredients you already have Make a list of what you need Only buy what's on the list COMPARE PRICES The price of food varies dramatically depending where you buy it. The local shop is likely to be much more expensive that a low cost supermarket. You may be surprised at the possible savings. COMMUNITY FOOD Inverclyde has many community food projects where you can get food at low or no cost. The community food has been provided by supermarkets to help people struggling with money and also help to avoid food waste. A link to the community food webpage can be found in a later topic.
Non necessary items
It may be necessary to reduce or eliminate some non-essential outgoings in order to get a better control of your money in the short term.
Do you have any of the following items:
i) Premium bank account - some banks offer premium accounts that include extras such as car breakdown cover, free overdraft and travel insurance. The cost of these can vary from £13 per month upwards. Ask yourself if you really need these bundled extras and if you don't talk to your bank about moving to a standard or basic account that doesn't cost anything.
ii) Gym membership - This can be a very large outgoing each month. If you don't use it much or at all check how quickly you can cancel it. Other options include:
Exercising outside for free on your own or with friends.
Joining a lower cost gym.
Pay as you go if you only use the gym occasionally
iii) Takeaway food
Sometimes we just can't be bothered cooking. We order a takeaway and spend £10 or £20 or more. There is no harm in having the occasional takeaway. How many times per week are you ordering takeaway. Can you reduce from twice per week down to one? Can you eliminate it altogether by having a night each week where you cook your own version of a takeaway.
iv) Alcohol and tobacco
Although we may enjoy either or both tobacco and alcohol it can have a bad effect on our health. Reducing, or ideally eliminating them both can have a positive effect on our health as well as our finances.
The average cost of 20 cigarettes in £10. Smoking 20 per day will cost £3650 per year. 2 bottles of wine per week can cost over £500 per year. Imagine the difference to your health and finances by reducing or eliminating this outgoing.