How to get your household finances back on track

January is an excellent time of the year to get your household finances organised.

UK households are spending £150 more on bills than a year ago, driven mainly by energy prices rises of more than £150 per household. There were 57 energy tariff price increases in 2018, compared to only 15 in 2017. Incredibly, half of all UK households are on variable energy tariffs, meaning that they could save money by signing up to a fixed rate tariff. Now is the time to get your household finances organised.

At the end of last year, Ofcom found that four million households are paying too much for their broadband. These households have slower, basic broadband and are outside their initial contract period – meaning they continue to pay the same amount and are missing out potential savings. Cheaper fibre now covers more than 90% of the UK.

Many are overpaying by accepting their automatic renewals on car and home insurance, known as the ‘loyalty penalty’. Citizens Advice research found that UK households face a ‘loyalty penalty’ across essential markets and could be overpaying by as much as £987 per year per household.(3)

Here the Bills Dashboard team gives its top tips for how to save money – and get more organised – in 2019.

Know your renewal dates – get organised

Make a note of important renewal dates in your diary, including your home and car insurance renewal dates, MOT, vehicle tax, breakdown cover, TV licence, fixed rate savings, broadband contracts, energy tariffs and mortgages. If you know when things renew, you will never miss a date and move to a more expensive variable rate, or miss a new deal. Get a free Bills Dashboard account and never miss a date.

Car insurance – timing is important

The sweet spot to renew your car insurance is exactly three weeks before your renewal date. Data from millions of car insurance quotes showed that the cheapest quotes are to be found three weeks before renewal. Also, consider the APR when paying monthly. DirectLine, for example, charges 23% APR to pay for car insurance on a monthly basis. Consider paying in full via a 0% credit card. Another tip is to use more than one comparison site to secure a cheaper quote – there are large variations in car insurance quotes via comparison sites, even from the same insurer. Get a new car insurance quote.

Energy tariffs – fixed not variable

If you are on a variable energy tariff – change it! You are paying more than you should. Get a fixed tariff. Even with the new energy price cap, you can save more by arranging a fixed tariff. If you are going to switch, do a little bit of research on your new supplier – customer service is an important factor, and remember that six energy suppliers went bust in 2018. Secure a cheaper energy tariff.

Credit card debt – transfer it

Many of us put spending on credit cards over Christmas. If you have a credit card – check your interest rate. If you are paying interest on your debt – why? There are many 0% balance transfer cards on the market. Move your credit card debt to a 0% card, and set up a regular standing order or a direct debit to clear the debt. Find a 0% credit card.

Mobile phone – know your usage

Check your mobile phone data usage. If you are using less than what you are paying for, then ask to change your airtime tariff. Many people overestimate their usage. Also, consider keeping your handset and just upgrading your airtime contract on a SIM only package. Use WIFI wherever possible (and safe). Find a new mobile phone deal.

Direct debit dates – the single best thing you can do

Find out the dates of your direct debits. Change the dates so that all or most of your regular payments come out a few days after you get paid. That way you will know how much you have left to spend each month after all your monthly bills are paid. 

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