Get ahead of the Budget: 10 ways to fight the squeeze

Take a look at our 10 ways to fight back against the squeeze and get your family finances back on track.

12:26 22 March 2013

1. Cut your food costs

 

With food prices continuing to rise, keeping your family fed and watered is a costly affair. But there are a number of steps you can take to push your food costs down.

 

•    Plan your weekly meals in advance and draw up a shopping list so you know exactly what you need to buy - don't be tempted by anything that's not on your list.

 

•    Use mysupermarket.co.uk to compare the price of your basket of goods at stores including Asda, Tesco, Sainsbury's, Waitrose and Ocado - then select the basket that's cheapest.

 

•    Shop towards the end of the day to take advantage of 'reduced to clear' offers.

 

•    Switch to supermarket own brands instead of big brand names, and make use of deep discounters such as Aldi and Lidl.

 

2. Lower your childcare costs

 

A recent survey by the Daycare Trust revealed that childcare prices are rising by more than the rate of inflation. Costs for after-school clubs, nursery and childminder places have increased by more than 5% in the past 12 months, and the average cost of a nursery place for a child under two is now £4.26 an hour. But there are ways to spend less.

 

•    Friends and family members can be very handy when it comes to looking after the kids. But be aware that if a friend regularly looks after your children in their own home, the care is for more than two hours a day and you pay for this care, your friend will need to be registered as a childminder.

 

•    Consider sharing a nanny and splitting the costs with another family near you through sites such as nannyshare.co.uk and thenannysharers.co.uk.

 

•    If you're a single parent and work 16 hours or more a week, or you're a couple and both work 16 hours or more a week, you could qualify for childcare tax credits. This could help you with up to 70% of your childcare costs, up to a maximum of £175 a week for one child and £300 a week for two or more children.

 

•    Employers often offer childcare vouchers in return for part of your gross salary. You won't pay tax or National Insurance on childcare vouchers up to the value of £55 a week. But be aware that these vouchers can affect the amount of tax credits you can get.

 

3. Slash your energy bills

 

It may be March but spring has yet to show its face and many households are still relying on their central heating to keep warm. It's therefore crucial to ensure you are on the cheapest energy tariff possible.

 

•    Switching to the best energy tariff could save you £282 a year, according to our research.

 

•    Choosing a dual fuel tariff (where your gas and electricity is provided by the same supplier) and paying by direct debit will also help to bring the cost down.

 

•    Never accept an estimated reading on your energy bill - always give your supplier an accurate meter reading to ensure you don't pay too much.

 

4. Save on petrol

 

With a proposed fuel duty increase due in September - we'll have to wait and see what the Chancellor does in the Budget to placate those calling for it to be scrapped - motorists are severely under the cosh. With petrol prices so high, so you need to be savvy about where you fill up.

 

•    Use PetrolPrices.com to find the cheapest petrol stations in your area.

 

•    Also keep an eye out for promotions from supermarkets - Asda, Sainsbury's, Morrisons and Tesco have all reduced their petrol prices. And Tesco often offers 5p off per litre when you spend £50 or more in-store.

 

•    If you live near a colleague, offer to drive them to and from work and split the petrol costs.

 

•    Whenever it's practical, cycle or walk instead of using the car.

 

5. Reduce your mortgage costs

 

Mortgage rates are at record lows so if you're soon to remortgage, or you are currently sitting on your lender's expensive standard variable rate (SVR), bag one of these fantastic deals fast!

 

•    If you can stump up a deposit of 40% or have sufficient equity in your home, you can enjoy a rate of 1.74% with Chelsea Building Society's two-year fix (£1,695 fee) or 2.64% with Yorkshire Building Society's five-year fix (£1,345 fee).

 

•    Even if you only have a deposit of 10%, you can take advantage of rates as low as 3.69% with Chelsea Building Society's two-year fixed rate mortgage (£1,695 fee).

 

•    Alternatively, if you won't be remortgaging for a while, consider overpaying on your mortgage each month if you can afford to. This will help you to pay off your mortgage more quickly and save you thousands in interest. Just check whether your lender allows you to do this first.
 
6. Cut your insurance bills

 

When it's time to renew your car insurance or home insurance, don't simply accept your insurer's renewal quote. The best deals are generally offered to new customers, not existing ones, so shop around for a cheaper deal.

Try to pay for your insurance upfront rather than in monthly instalments - some insurers charge interest on monthly payments, bumping up the overall cost by 5% or more.

 

7. Reduce the cost of credit card debt

 

If you have a lot of debt on a credit card charging interest, move it to a 0% balance transfer credit card and avoid paying interest for more than two years!

Both the Barclaycard Platinum Credit Card with Extended Balance Transfer and Halifax Balance Transfer credit card offer interest-free balance transfers for 25 months. Just watch out for the 2.9% and 3% respective fees.

 

8. Save on a broadband bundle

 

Switching to a better broadband deal could save you as much as £218 a year, according to our research. Opting for a broadband bundle, where services such as your landline, broadband and TV are held with the same provider, will also save you money.

 

9. Make the most of tax-free savings

 

Saving into a cash ISA allows you to avoid paying tax on the interest you earn. However, you only have until April 5 to use up this tax year's cash ISA allowance of £5,640, so don't waste it. From April 6, you'll get a brand new cash ISA allowance of £5,760 - the earlier you use this, the more you will benefit.

Both Cheshire Building Society and Santander offer easy access cash ISAs paying an annual tax-free rate of 2.50% (variable).

If you're prepared to tie up your funds for two years, Santander's Major ISA pays 2.80% for two years, or 3.00% if you have a Santander 123 current account or 123 credit card. You'll also get an additional 0.10% bonus if Rory McIlroy wins an eligible golf 'Major' between April 2013 and April 2015.

 

10. Give up smoking

 

Tax on cigarettes increases automatically and is due to rise by at least 2% over inflation until 2014. In last year's Budget, tax on tobacco products increased by 5% above inflation, adding 37p to the price of a pack of 20 fags, and we're likely to see a similar increase in this year's Budget.

If you smoke 20 a day, you'll already be forking out around £2,726.55 a year. Higher tax will push this up further. But quit and you'll be quids in. Read my article to discover 10 ways you will be richer as a non-smoker.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.