Tips for trimming your household budget

Tips for trimming your household budget
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From spiraling electricity costs to the rising cost of living, balancing a household budget is no easy task.

So where do you begin when seeking ways to reduce your household bills?

“Knowledge is strength. If you know where your money is being spent, that’s a good starting point,” says financial adviser Greg Pride, of Centric Wealth Advisers. “If you have an accurate record of your spending, it becomes apparent where a problem may be – it may be technology-related, it may be leisure-related or it may be clothing-related.”

Here are some areas to consider in your quest to trim your household budget:

Energy bills

With summer coming to an end it's time to start cutting down on the air con use. Try using air conditioning only on days when the temperature exceeds 30 degrees or better still, use a fan instead. The average fan costs less than 1 cent per hour in electricity, while even the smallest sized air conditioner uses up 12 cents per hour.

It’s also a good idea to assess the energy efficiency of your home. The federal government’s Your Energy Savings website suggests sealing gaps and cracks, and covering fan outlets and fireplaces when not in use, to avoid up to 24 per cent of heat loss in winter. Smarter home habits, such as switching off appliances at the wall, reducing the amount of hot water you use and hanging out clothes to dry instead of using a clothes dryer can also reduce your energy costs.

Insurance costs

You can save hundreds of dollars by shopping around for a better insurance deal rather than sticking with the one you have. If it's been a couple of years since you've looked at what's on the market it's definietly time to check again. 

If you are happy with the company you are with there are some small things you can do that might help keep costs down. This includes installing deadlocks and other security features on your home – and car – which can save you money.

Also keep in mind that bundling your home and car insurance with one provider can reduce your premiums.  

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Technology costs

Are you on an internet plan with all the bells and whistles, but only using half your allowance?

It’s a good idea to regularly review your phone and internet deals to ensure you are not paying for unnecessary features. Think about signing up for online streaming services instead of paying for an expensive Foxtel subscription. Again, bundling your home phone, mobile and internet can save you money so look for discounts on packaged deals. 

Credit trap

Credit cards are one of the great conveniences of modern life. However, you can pay a high price for that convenience if you don’t manage your credit card debt effectively.

With interest rates around 17 percent on average, you end up paying a lot more than the original purchase amount – unless you pay off your card in full each month. Make it a priority to pay off all of your credit card debt and then pay the balance every month. Throwing your money away on interest repayments is a sure fire way to ruin your budget plans. 

Cut back on extras

This applies to every member of the household. For adults, it may mean reducing or cutting out completely any reliance on takeaway coffee – a daily habit at $4 during the week can set you back more than $1000 a year. 

For the kids it may mean packed school lunches or second-hand toys handed down from family and friends. Extra-curricular activities for adults and children can cost more than you think. Look for free options for the kids, and cancel that gym membership you’re not using in favour of swimming or running.

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