How To Save Money As The Cost Of Living Rises

Inflation is now at 4% and the cost of living is rising, leaving consumers feeling the pinch. We take a look at how to save money and get the best deal on products and services.

VAT rose at the beginning of 2011, petrol prices are on the increase as are day to day living costs, not to mention such as car insurance premiums rising 44p every day and the prospect of the Bank of England raising the base rate sooner rather than later.

However as Kevin Moutford, head of banking at moneysupermarket.com points out “It is easy to accept rising costs as a fait accompli but there are many ways people can lessen the impact.

The first step should always be to review your outgoings, ensure you are on the best deal for your needs and start looking at ways you can be more savvy with your spending – all steps which can help to free up some vital extra cash.”

So first things first, to help ensure you manage your personal finance effectively, it’s a good idea to set up a budget. That way you can manage your income vs expenditure.

For the outgoings it’s important to get hold of the best deals, whether it be for your mortgage, savings, energy, motoring costs or simply your day to day living expenses.

Our top tips, in conjunction with moneysupermarket.com, to help reduce your outgoings are:

• Review your mortgage – High inflation may lead the Bank of England to increase Base Rate. If you are on a variable rate mortgage and are worried about any increases to your monthly payment, consider switching to a fixed rate deal.
• Use a cashback credit card – If you can currently afford your monthly outgoings then consider using a cashback credit card and let your spending make additional money for you. You need to be disciplined and pay off your full credit card balance each month.
• Consolidate debt – Reduce expensive borrowing by consolidating existing debt to a 0 per cent credit card or low rate personal loan.
• Protect your savings – Protect your savings from the taxman. Utilising your full ISA allowance will help maximise your savings and prevent you paying unnecessary income tax on savings.
• Switch your energy supplier – People switching from their gas and electricity energy providers’ standard tariff to the best online deal could save £187.
• Reduce the cost of motoring – Customers who use moneysupermarket.com to renew their car insurance save on average £270. Reducing your annual mileage will not only decrease your car insurance premium, but will also cut the cost of fuel.
• Shop online – Consider doing your supermarket shopping online and set up a favourites basket of essential products you will need. This way you won’t be tempted by all of the additional offers which entice you when shopping in store.You can use the service from such as mysupermarket.co.uk which enables you to compare the prices of your shopping between the major supermarkets.
• Use discount vouchers – Take advantage of discounts, vouchers and special offers to help reduce your outgoings.