The average US Household spends around $63000 a year. Around $16000 of this is housing costs, such as rent or mortgage, maintenance costs, and utilities. Just over $5000 is spent on debt. The average household with a credit card owes $15654, but the average worker's income is only $44564. Admittedly, if you live in a couple, the pressures can be eased, but if your outgoings are above average, or your income is below average, as they often are for families with young children, things can be a struggle.
When your income and expenditure amounts are similar, there is often only one place to turn. Further debt. Getting into debt is impossibly easy, as countless banks and private loan companies are offering everything, to everyone, all of the time. Even those with poor credit can take out a payday loan at the drop of a hat. Then, once you are in debt, your credit rating has dropped, and you’ve got further expenses hanging over your head. Even worse if your credit hasn’t come from a respected provider and you are faced with an extortionately high level of interest. This more often than not leads to further debts.
Finding yourself in a tricky financial situation can have further negative effects on your family.Debts are mounting, repayments are stacking up, and it feels like there’s no end in sight. This can lead to depression, physical health problems, the breakdown of relationships, poor diet and more. So, instead of falling into debt, or further debt, let's tackle things head on. Take a look at your family budget, whether it’s comparable to the average households or not, and find ways to slash it. Here are some of our biggest expenses, and some ways you may be able to reduce them for your family.
Housing
We’ve all heard that rent is a waste of money, and this is technically true. Long-term, you aren’t getting anything from it in the same way as if you were paying off a mortgage. But, on the other hand, you are getting to keep a roof over your head, and current research shows that renters are often paying out slightly less for housing than owners pay on their mortgage.
So, if you are renting, don’t worry too much. Your chance to buy may come, but don’t feel like you need to rush into it before you are ready. However, there are other options. A mortgage might be more than you currently afford, but a private loan from family to buy a house could be significantly cheaper and more flexible. Or, you could look into part buy, part rent deals.
When it comes to maintenance of your home, owning is much more expensive as you are responsible for everything, not a landlord. So, do it right. It can be tempting to save money buying cheap parts, furniture, and supplies but this is often a false economy. They’ll need fixing and replacing again much sooner, costing the same again. Instead, look for a middle ground, and always read a wide range of reviews.
Utilities
This is perhaps the worst time of year for utility bills. If you pay your gas and electric by direct debit, they’re not usually affected too much over winter when you’ve got your heating on full blast. It’s in the weeks and months after where these changes start to show up on your bills.
That also makes this a great time of year to switch providers. Clear your balance and start shopping around for the best deals. Many of us stick with the same provider out of loyalty because we can’t be bothered making changes, or because we are renting property and don’t think we’d be allowed to change.
However, switching is now easier than ever, can often be done completely online, and most landlords are happy for you to make changes as long as you contact them first and get it done properly. Switching could save you literally hundreds every year. Even if you don’t want to, or can’t switch, you should look at the tariff’s provided by your current supplier, as you could be on the wrong one.
When it comes to other bills, like phone contracts and entertainment packages, it’s important to take a look at what you are actually using. Do you watch all of the channels you pay for? Do you really need super-fast internet? Do you even get it, or are you paying more for speeds your line never achieves? Look at your cell phone bill, do you use all of the minutes you pay for, or could you change to a different plan? Don’t waste money because you can’t be bothered to check these things.
Insurance
The average insurance policy is 20% more expensive than it was in 2011. Car insurance is the biggest culprit, but home and life insurance policies are also rising. Fortunately, your car insurance is an easy place to save. Take a look at your policy and make some changes if you can. If you can’t change until the end of your agreement, it can still be worth running some comparisons so that you are prepared.
Try checking out this defensive driving course overview to see if taking it could save you money, look at where you keep your car overnight, adding a named driver and security devices or having a black box installed to prove that you are a safe and responsible driver. When it comes to home insurance simple and relatively cheap things like installing better locks can save you money.
Food
A four-person household in 2018 can spend up to $250 a week on food. A lot of this can be avoided. Some is on eating out or snacking on the go, which can be easily avoided with a little more preparation. Then, when it comes to your weekly shop, meal planning and writing shopping lists can be a massive help. Some people also find that online shopping helps them to keep a better track on their expenditure and find cheaper options more easily.
Slashing your budget doesn’t have to mean that you make huge changes to your lifestyle. In fact, making these changes might not change it noticeably at all.
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