Although this is not strictly ‘legal material’ we thought clients might welcome some tips on managing their household finances during these straitened times.
Cutting Fuel Costs
Despite the recent falls in prices, the cost of fuel is still considerably higher than it was just a couple of years ago. Shopping around between different providers may well produce decent savings, as may agreeing a ‘bundled’ deal to obtain your energy supplies from a single source. There are a number of comparison websites on the Internet which may help you make a decision.
Of course, one way to reduce your energy costs is a simple, old-fashioned reduction in use. For example, if you have fireplaces which are open but never used, a chimney balloon may significantly reduce your energy consumption by reducing the draft through the chimney. A one or two degree reduction in the thermostat settings of your central heating and a five to ten degree reduction in the temperature of your hot water will produce immediate savings, as will taking simple steps such as turning off lights in rooms which are not occupied, turning timed water and heating on a little later and off a little earlier (although in some properties it might be almost as cheap to keep the heating on), not leaving windows and doors (external and internal) open unnecessarily and turning electronic devices off at night rather than leaving them on standby.
Investments that can offer fast returns in terms of reduced energy bills include using ‘low consumption’ light bulbs, installing loft insulation and draft proofing. The economic benefits of more sophisticated changes, such as switching to a condensing boiler, installing cavity wall insulation, solar panels and the like, are more difficult to calculate and should be considered carefully before a purchase is made.
Living Within Your Budget
Make a budget based on the costs you can’t avoid and those you can. Make sure that your ‘avoidable’ costs are known and that you control them. However, if you know you will need something in a year or so, it might make sense to consider buying it when prices are being slashed (as they are for many goods, especially expensive items), rather than waiting for the market (and prices) to rebound.
It is claimed that a quarter of all food bought from UK supermarkets is thrown away. Look at your shopping habits and eliminate waste as far as possible. Make sure you are aware of ‘2 for 1’ and similar offers on goods you use frequently, but remember that a saving in the cost of goods may be lost in additional travel costs. Being aware of prices offered by different retailers for the items you want to buy is recommended, but avoid impulse buying. Buying on the Internet may be a good idea, especially if your normal ‘weekly shop’ involves driving and if you tend to buy on impulse. Planning meals in advance and buying only what is needed for them is a very effective way to reduce waste.
Making Your Money Work for You
With interest rates falling, financial institutions have been cutting the rates they pay to savers. Check the rates your savings are earning; you may be surprised by how quickly the attractive interest rates used to tempt new investors are reduced.
Similarly, look at the costs of any financial products you buy such as insurances, your mortgage, etc. as savings could well be made.
Nearly one fifth of all state benefits are not claimed, especially those made available for families and the elderly. Make sure you claim any benefits to which you are entitled. The www.benefitshelpline.com website may be helpful as a starting point.
Make Sure You Have a Will and an LPA
You may think this is an odd suggestion, but having an up to date will may prevent your estate incurring unnecessary costs (and possibly avoidable tax liabilities) in the unfortunate event of your demise. Similarly, creating a Lasting Power of Attorney (LPA) will be hugely beneficial in the event that you are unable to administer your own affairs and need someone else to look after them for you.
More importantly, however, having the right documentation in place speeds up administration. Most wills and LPAs are relatively straightforward to prepare.