7 Ways To Beat Higher Household Bills

Rising household expenses are stretching budgets to the limit. Here's how to cut the impact of bills on your finances.

This year household bills will rise almost three times faster than average wage inflation. You don't need to be a mathematical genius to see for many of us the figures just won't add up. Thousands of households are facing far greater costs as council tax, utilities and food prices surge but salaries fail to keep pace. Budget Deficit According to mysupermarket.co.uk our grocery spend will rise 11% this year, while the AA forecast an 18% hike in petrol prices. A recent article from The Times suggests this year's increase in council tax will force average household costs* over £3,000 for the first time. That's a £250 chunk out of our income every month. Sorry to pile on even more bad news, but that's before we even think about increasingly expensive mortgages. Our monthly mortgage outlay is rising too as lenders attempt to protect profits and recover losses from the infamous credit crunch. According to the Council of Mortgage Lenders (CML) affordability for homeowners deteriorated over 2007. By December homeowners typically put 18.9% of their income towards mortgage interest payments, compared with just 16.5% in December 2006. So, how do you beat higher household bills? Thankfully, there are plenty of things you can do to keep spiralling costs in check. Follow these seven steps to better household finances: Seven Ways To Beat Higher Bills1. Your mortgage Re-mortgaging to a better deal will probably have the greatest impact on your household finances. An average borrower could easily save £100 or more each month. This could compensate for a large chunk of money lost to higher bills. Visit The Motley Fool Mortgage Centre today to see how much you could save. 2. Your credit card If you have credit card debts don't pay more interest than you need to. Get your expenditure down by moving to a 0% balance transfer credit card. Take a look at Virgin's credit card which will put a freeze on your interest bill for a full 15 months. 3. Your personal loan Again if you have a personal loan, consider switching it to a market-leading deal as long as there's no early repayment penalties involved. If you swapped the most expensive £5,000 loan with an APR of 19.9% for the cheapest with an APR of just 6.7% you could save more than £1,000 in interest over three years. Compare loans here. 4. Your food bill 2008 could see a double-digit rise in food prices. Cut your grocery bill by finding the cheapest deals for your weekly shop using the price checker at mysupermarket.co.uk. They'll even tell you if your entire shopping list can be bought more cheaply at an alternative supermarket. 5. Your utility bills We're less than three months into the year and there has already been a series of hikes in energy prices. We're so determined you don't waste money needlessly on your utilities we'll devote a whole article to this topic soon, so watch out for that. 6. Your insurance policies The chances are if you haven't checked the market recently you'll be paying over the odds for your contents, buildings and car insurance. As ever the 'shopping around' principle applies and to make things simple for you we have all three on offer at The Motley Fool Insurance Centre. 7. Your budget I'm sure we're all a little guilty of wasting money on gym memberships we never use, expensive Sky packages we hardly ever watch or rip-off mobile phone and broadband tariffs. Perhaps you could even wean yourself off Friday night's takeaway habit! You don't have to cut out all your luxuries. Just be a little more careful with your cash and you'll be amazed how much you can save. There's no doubt many of us are beginning to feel the pinch. New research from The Fool reveals most of us think our rate of personal inflation - based on our household expenditure - is far higher than the official measure of inflation, the consumer prices index (CPI). CPI currently stands at 2.2% although one-third of us reckon real inflation is between 7% and 9%. A further 30% believe the rate is even higher. But with these clever tweaks to your outgoings, rising household bills should be easier to manage. *= Includes council tax, water, energy and telephone bills. More: For budgeting tricks take a look at Kick That Serious Spending Habit...Today! | Make clever cutbacks with our Money Saving Tips