Whilst everyone focuses on monthly income and outgoings, annual costs are just as important. To this end, here’s a quick run through of some costs and how you may cut them down or avoid them.
Whether it’s sorting out your rent and mortgages or better assessing your transport options, you may be surprised at where you can effectively cut costs. More importantly, many of these options don’t ask for you to make any personal sacrifices or detrimental changes to your life style, which always helps.
Rent and Mortgages
Accommodation is always expensive, but you have to live somewhere. If you rent somewhere, you generally have very little control over this expense. That being said, if there are spare rooms going, flat or house mates are a great way to share the costs and cut expenses. This of course depends on how your landlord operates. Some might charge per tenant, as opposed to charging for the property over all, although this is rare.
As for the mortgage, this is something that can often be a drain on resources. Yet if you have the spare money, it’s always worth looking to see if your bank will let you pay off more or pay early. Some banks offer incentives for this, but it’s not always an option.
Do you have a car? How often do you drive? For many people, they have a car that they don’t really use. Sometimes public transport is cheaper, although the car still has many uses.
Yet, there are plenty of times where it might be better to rent a vehicle. If you only use your car for long business trips, for instance, then this is definitely the case. A quick look will reveal that car rental insurance is usually much cheaper then insurance maintaining and owning a car all year around.
When renting a car, you don’t have to pay for its MOT’s or to maintain its engine. You’re also not taxed either. In addition to the cheaper insurance, this removes several costs all together.
When tax season comes around, it’s often easy to be caught unaware. Now, one can’t exactly remove taxes, but it always helps to be prepared. In this case, saving money throughout the year makes for a sensible financial strategy.
You generally have a rough idea of how much you’re going to have to pay, so don’t wait until April to pay this all off. Saving a little money each month to put towards this will make taxes, which are arguably one of the bigger annual expenses, a little easier to afford. Taking the money out in one go will be a heavy blow, as it eats a lot of a given month’s income, naturally.
In summary, this should be even easier if you save money through your rent or mortgage, in addition to readdressing your transport options. They might seem drastic, but they have the potential to save a lot of money.