Time to shop around for better deals

Home

Members

Services

News & Info

Entertainment

Help

Content Starts Here

Time to shop around for better deals

Search: Small business finance

When Mervyn King, governor of the Bank of England said that inflation had reached 3% in April and could hit as high as 3.7% by the end of the year it hardly came as a huge surprise. Although the average family may not know the official rate there was little doubt that money wasn't going as far as it once did. Rising energy costs, soaring fuel costs and a noticable jump in the weekly shopping bill were more real than any economic figure.

In the Bank of England's bleakest economic assesment for years King warned that families need to prepare themselves for years of stagnant growth in house prices and take-home pay, but big rises in the cost of living.

The inflation forcasts are well above the Bank's 2% target and the highest for 16 years. Add to this the challenges brought on by the credit crunch and the economy is set to grind to a halt by the autumn with growth of just 0.2% a quarter over the rest of the year.

King said: "For the time being at least, the nice decade is behind us. We are travelling along a bumpy road as the economy rebalances."

House prices are already falling and Halifax said last week that homeowners should be prepared for values to fall until at least the end of 2009 while earnings catch up, enabling first-timers to get back into the market.

So in the meantime what can you do to ease the purse strings? You can brush up your negotiation skills and start shopping around - it's time to become a much more discerning shopper.

Food shopping

Reduce your food bills by using websites such as www.mysupermarket.co.uk. The claim is that the site can take 20% off your food bill by scanning the four main chains to find the cheapest option. But remember to consider fuel costs. Also buy locally in small independent shops. Get out of the habit of going to one place for everything and instead go to the local butcher and baker - it's better for the community and there are often fewer food miles involved.

Energy costs

Turn the heating off, summer is coming and you can always put a few more layers on!

Wholesale gas prices have shot up more than 50% since the beginning of the year so check out www.energywatch.org.uk to find the best deals and consider fixing your tariff.

Mortgage

If your mortgage deal has come to an end don't just sit around - find another one. Either negotiate with your existing lender or move the mortgage. If your repayments drop don't spend the money. Set aside the difference to help reduce any other debt you may have such as a credit card or person loan - the faster you can get rid of debt the better. Or if you don't have any debt then keep the repayment at the higher level so you can reduce your mortgage term faster. Even a little extra a month can make a huge difference over the term of the loan. On a £200,000 mortgage the recent interest rate cut would mean a saving of £30 - maintain your payment at pre-cut rates and you would knock £10,081 off your loan over the term and would allow you to repay it 14 months earlier.

Cut fuel costs

The difference between the most expensive and cheapest place to fill up is about 20p a litre. Find out where to go from www.petrolprices.com. And of course use the car less or use alternative transport. For short journeys just walk - it's a great form of exercise and it doesn't cost a penny.

Also it's worth noting that according to petrolprices.com many forecourts increase the rate on fuel by 1p just before the weekend because that's the busiest day so don't fill up on Fridays!

Insurance

Instead of leaving renewal to the last minute and going with the old one because it's just easier, shop around for the best deals. Comparison sites like www.moneysupermarket.com or www.gocompare.com can help.

Banking

Have a closer look at the fees you incur and either switch bank or negotiate to a better deal. If you have savings you are in an even stronger position as banks are very keen to secure funds from investors. Compare using sites like www.moneysupermarket.com, uSwitch and MoneyExpert will give you the best deals.

Maybe it's a good thing that we get back into the habit of sourcing the best deal, not just financially but environmentally too. Ensuring that we make our buying decisions based on fact and conscious choice rather than habit and laziness is a step in the right direction - regardless of your financial situation.