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Shoppers can make some major savings by ‘downshifting’, involving purchasing a cheaper ‘value’ version of an everyday essential. This could reduce a person’s average weekly spend on food by 30 percent, from £60 to £40.
This works out at savings of £1,040 a year, according to experts at WEALTH at Work. The group also recommended planning a shopping list in advance to allow more time to search for the best deals while avoiding buying non-essential items.
Shoppers can also be on the lookout for discounts to make sure they are getting any savings they can.
Discount vouchers are available on many websites and through employee discount schemes. A five percent or 10 percent discount can mean major savings especially for large purchases.
The financial wellbeing specialists provided a list of several steps people can take to reduce their costs this year.
Make a budget
Creating an overview of an individual or household’s income and outgoings is a huge help in controlling finances.
A person can use their bank statement to determine how much their monthly income and outgoings are.
The outgoings can be itemised into individual costs such as mortgages or rent, energy bills and debt.
It’s also important to cancel any unused subscriptions or memberships that are needlessly adding to a person’s bills.
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Prioritise managing debt
The financial group urged people to pay off expensive debts first. This is because the high interest will mean people will end up having to pay out more to clear the debt.
Those with credit card debt may also be paying more interest than they need to. A person may be able to shop around for a lower interest rate or switch to a card with zero percent on balance transfers.
People with several debts may also want to consolidate these into a zero percent or low interest balance transfer card.
This will allow for more money to go towards paying off the debt meaning it can be cleared over a shorter period.
Once the budget has been set up, it’s important for a person to keep track of their money. This can be done with regular budget check ups.
A person’s income and outgoings may change with time so they may need to tweak their budget to adjust for this.
Save on household bills and auto-renewals
Policies for car, home and travel insurance often automatically renew each year so it can be worth looking around to make sure a person is on the best deal.
People should find out when their contract is due to end and search around a few weeks earlier.
This gives them time to negotiate with their current provider where appropriate to see if they can bring their price down.
Jonathan Watts-Lay, director of WEALTH at work, said: “Now is a great time to work out what your financial situation really is, and take action to make sure you are in control of your finances in 2023.
“When making a financial plan for the year ahead, don’t worry if you don’t know where to start as there is plenty of help available.”
“For those who are worried about debt, it’s always worth speaking to lenders to see if they can help if you are struggling with repayments and Citizens Advice can help you understand how to deal with any debts.”
Many household bills are set to increase from next month as well as energy bills, including broadband and mobile bills, council tax and water bills.
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