We never used to open bills, we guestimated how much money we’d have to spend out and our priorities were all in the wrong. Now, things have changed.
Since getting on the thrifty train, we check our household budget on a monthly basis.
For instance, we monitor and track how much money we spend on gas and electricity, trying to either have the same as the previous month, or have a lower usage amount. Then, every three to four months we really scrutinise our budget and see if we’ve been overspending, or if there are any better deals to be had with other providers.
Although it can feel like a chore to get your household budget in order to begin with, it is very much worth the effort! Very quickly you can work out what you’ve got coming in, what’s going out, and what you have left over to play with or save.
Black and white, staring us in the face around 18 months ago, we realised that we couldn’t make ends meet.
We didn’t open bills, guestimated how much money we’d have to spend out and our priorities were all in the wrong. However, we were not the only ones who are like this.
Jumping forward to now I feel like such a different person but it only took a few changes. Now, with a household budget in place, we are making sure we stick to it.
Make a budget
Most importantly you need to understand your budget. To begin with, you need to work out what income you have, which shouldn’t be too hard. Open up your internet banking, grab some payslips and check what regular payments you have.
For your outgoings, it may take a month or so to really realise what you pay out if it changes month on month. Things like your mortgage/rent and council tax will be the same amount every month but, water, gas and your electric bills pay go up and down each month, depending on what payment arrangements you have set up.
Choose how to pay
If you pay by direct debit, you will normally be able to get a discount. For instance getting your gas and electricity with one company, and paying by direct debit, will normally give you an extra discount. However, this may not always be the best deal, as you could pay less for having your gas and electricity with different providers.
Consider using a different account to pay your bills. The Santander 123 current account gives you cashback when you pay your bills. With a quick check on their calculator, I worked out I could earn about £70 cashback a year on my bills!
I pay slightly more for my gas bill through the summer when the bill is low. As our bills (like everyone else’s) are normally higher in the colder winter months it offsets the cost. Paying slightly more when our usage is lower means we don’t get hit so high during winter.
Even if I do overpay, I could choose to have a payment month off, or ask for the money to be credited back to me. It’s much better than paying less than I owe and having to up the monthly payments, which could then leave us short for other things.
We do an audit of our utility bills every few months and see what we can shave off by switching providers.
Not just reducing your energy costs either but, you can also change your providers for your home phone, broadband, mobile and TV.
In my experience, changing providers has been no real difference in service and we don’t notice the change over. When we changed out home phone to an alternative provider, they said the engineer would be round to disconnect the line, do some engineery things and connect it to our new provider. We didn’t notice at all as it was in the middle of the day and we were both at work. Totally painless but it saved us over £10 a month at the time!
If you are struggling to pay your household bills, you need to seek help. It may be that you are entitled to benefits to support with payments. It may be that your current provider can suggest a different payment plan to help balance your monthly costs or send you tools to help reduce costs.
There is no point burying your head in the sand as things will just get worse (trust me, it’s not worth it!). Get free debt advice from a charity like StepChange and start making a positive change.
What are you doing to cut back on your household bills and spending for 2015?
In collaboration with Santander
Ricky Willis is the original Skint Dad. A money-making enthusiast, father, and husband to Naomi. He is always looking for unique ways to earn a little extra.