4 ways to reduce your monthly expenses
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Your fixed monthly expenses are always going to take up the majority of your income, one of the best ways to get on top of your finances is by taking control of these expenses, reducing these then gives you the freedom elsewhere to save or pay off your debt quicker.
Here are four ways in which you can easily reduce your monthly expenses:
1. Credit Card Balance Transfers
This often sounds quite daunting, however as it credit cards are one of the highest costing forms of credit it is something you should always keep on top of. Balance transfer credit cards offer you the opportunity to take your current credit card balance and place it on a new card with a lower interest rate or potentially just a better all round deal. If you look for a balance transfer credit card with long period of 0% interest you could not only reduce your monthly expenses but also the overall costs of the credit, such as Barclaycard’s 28 month deal! You will typically be charged a fee, a percentage of your balance when you transfer so make sure you also compare these as well as the interest free term!
Example savings: A £1500 debt, paid off at £100 per month will take you 18 months to clear on a 19% APR credit card, switching to a 0% interest deal you could pay off your debt at £100 per month in 15 months. By spreading your payments across a 28 month deal you could reduce your monthly repayment to £57 per month, saving you £43 without being charged more in interest!
Currently mortgages are available at some of their cheapest ever rates and with deals such as fee free mortgages it is worth taking a look at just how much you could save on your monthly repayments by switching! The best way to do this would be to use a mortgage advisor, ideally one offering free advice (such as First Mortgage), so if they can’t find you a better deal than what you already have then you haven’t wasted any money!
Example savings: On a £150,000 mortgage, at 4% you are likely to be paying approximately £800 per month, the Chelsea Building Society offer a 1.99% fixed rate mortgage and monthly repayments will be £709, saving you £91 per month!
3. Compare Utility Deals
Don’t become too complacent with your utility providers, some people tend to stick with the same gas and electricity provider for years even though they are aware that they are not the cheapest deal on the market! Gas and electricity companies now offer switching services, all you need to do is fill in the online forms, submit your meter readings and they will do all the hard work for you! Find a price promise deal that will mean you are always going to get the best deal or use a price comparison site to compare all of the available utility deals on the market.
4. Don’t forget the small expenses
It may be easy to forget the £6 Netflix subscription, the £5 Lovefilm subscription as well as any others you may have, but these could quickly add up and take a larger proportion of your budget than you may expect! Take time to evaluate whether you need all of the subscriptions you have, if you have a busy period, why not cancel your account for a few months until you have time to use it properly? If you shop for groceries online you may be paying anywhere from £3 to £6 every time you order your food however Tesco and Asda are now offering monthly passes which means you can get your groceries delivered to you however many times you require during the month from only £7.50! With a normal £4 delivery slot each week you could save approximately £60 over the course of six months.