How Can I Bring Down My Monthly Outgoings?

First of all, I think monthly outgoings should be defined as any necessary (or sometimes frivolous) cost that you as an individual have to bear to support your household.

I’m structuring this article around my own life and costs that I have in keeping a three bedroom house going. I am married, so I have a wife that contributes to the cost of the household, so some of the outgoings will not apply to single people.

According to my own spreadsheets, in my household we have the following list of monthly outgoings:

• Mortgage
• Life insurance
• Home insurance
• Gas
• Electric
• Water
• Sky TV
• Telephone
• Broadband
• Mobiles
• Council tax
• Food

It’s quite a lot really!!!

So how can you reduce any or all of these monthly outgoings?

The mortgage is not that simple. You may be tied into a deal that has penalties to exit, so unless your mortgage has no penalties to exit and you can find a cheaper product with another lender, there really is not a lot you can do to reduce the monthly cost of your mortgage.

Life insurance is sold in large quantities because the advisor that sells it receives a decent commission for selling it. Simply put, the level of commission can vary massively depending on who sells you the policy. Life insurance companies have a “standard rate”, which they offer to any advisor. What you probably don’t know is that many estate agents and banks that offer life insurance actually sell the same products as everyone else, with inflated premiums (above the standard rates), so that they receive a larger commission.

If you bought your life insurance through your estate agent when you bought your house or through the bank/lender when you last refinanced, chances are you could save money by shopping around. There are plenty of internet brokers who will sell you the policy at a discount off the standard rate – they achieve this by sacrificing some of their commission. You may even be able to go to you financial advisor and ask them to sacrifice all of the commission and pay them a fee for arranging the policy.

Home insurance premiums vary massively across the multitude of providers out there. Usually the reason for the variation in premiums is the level of cover offered. Most insurers that are price competitive will offer the basic cover to ensure that your property is protected, but fail to offer cover for legal expenses, accidental damage and cover for your belongings outside of your property. The best thing to do is make sure you are comparing like with like, and only when you are sure that the policies you are comparing all offer the same features and cover, choose the cheapest.

You’ve probably seen lots of adverts for companies offering comparisons of the various different utility companies, claiming that they are able to save you money on your monthly bills, I certainly have. I must confess, I’ve not looked into switching my gas and electricity recently, as I moved to Utility Warehouse last May and have been happy with the price and service I’ve received to date. It is an area I will look into more at some point in the future however.

I’ve not looked into moving water suppliers so I will decline to write much about this at this juncture, I will however, post an article about saving money on all utilities at some point in the future, as it’s something that I will be looking into myself in the near future.

I used to pay over £50 a month for my sky tv bill. That’s quite a lot really, so I decided that as the football season was over, I would ring them up and reduce the amount of channels I subscribed to, and find out how little I could actually get my bill down to. As it turns out, once you’ve been with sky for a year, you can reduce your subscription down to the “free to air” channels, thereby reducing your bill to £0 a month. I’m not sure if this would be applicable to cable tv, but I imagine it’s not too dissimilar. Alternatively, if you don’t already have sky or cable, you could buy a free to air set top box and have access to the same channels, there is of course a cost in buying he set top box.

I will finish this article off tomorrow as it is now time for me to go to the gym and do some exercise…

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