Saving Money on Household Bills

Strategies for Reducing Bills

There are three main strategies that you can use to reduce your household bills.

The first is to check that you’re only paying for what you use or need, and that you’re not paying more than necessary for that.
The second is changing your habits or behaviours so that you do not use or spend as much.
The third strategy might be described as ‘spend to save’. These options require some spending upfront, but will afterwards deliver considerable savings. They may therefore not be open to everyone. However, if you can save enough from the first two strategies to consider any of these, they are likely to have a strong payoff over time.

Checking Your Payments

The first step in reducing your household bills is to look at what you’re paying, and make sure it’s right.

There are two aspects to this. First, are you paying only for what you use, and second, are you paying more than you need for what you use?

1. Paying for what you need

With gas and electricity, you are likely to be paying for a metered supply. Your gas or electricity comes into your house through a meter, and you only pay for what you use. There is therefore little scope to mess with that.

Many houses also have a water meter. This means that you are paying for what you use—but it can also mean that you need to be careful about consumption. If you do not already have a water meter, you can apply to have one fitted. This makes a lot of sense if you live alone, or don’t use much water. However, for a family, it can be a double-edged sword, because you could end up paying more.

Two other areas that often offer potential savings are broadband and phone.

Broadband and landline phones are often sold bundled with television packages. It can therefore be hard to understand exactly what you are paying for. It is worth spending a bit of time getting familiar with your bill to check that you really need all the options.

For example, many people upgraded their broadband during the pandemic to cope with the demands of home-schooling. You might be able to reduce the level of service now, if your children are back at school, and you have moved back to the office.

More broadband or better wifi?

Be aware that your broadband provider wants to sell you more expensive broadband, NOT solve the problems that you are having receiving Zoom calls.

You may find that what you needed was not more broadband, but a better solution to ensure that your wifi reaches all areas of your house. A discussion with a telecoms consultant about a mesh system could pay dividends if it allows you to reduce your broadband bills.

You may also find that you could save money by reducing your level of service a bit: downgrading to free evening calls only, rather than free calls at any time, for example, or taking a smaller television package if you do not watch all the channels, or usually use a separate streaming service.

It is also worth checking your Council Tax bill in the UK (and local taxes elsewhere). One money advice site estimates that hundreds of thousands of houses around the UK are in the wrong Council Tax band, and paying more than they need for services. You may also be able to get a reduction, for example if you live alone, are the only adult in the house or you are on a low income. You can also apply to pay your Council Tax over 12 months instead of 10, which reduces the monthly payments, and may make it easier to budget.

Paying the right price

The second area to examine is whether you are paying more than you need for services.

The best way to do this is to use price comparison websites for all your major bills. These will show you whether you are paying about the right price, or too much.

If you are paying too much, you should consider switching to an alternative provider.

Warning! Check the small print first before switching!

It is not always a good idea to switch, even if you are paying a bit more than you could elsewhere. Before you press ‘go’ on the switch, make sure that:

You will not be liable to pay a penalty to switch (for example, if you are signed up to a fixed rate contract for a set period);
Your alternative provider gets reasonable reviews from customers, especially for customer service (there may be a reason why they are cheap); and
The switch will not have any knock-off effects on any other services or prices (for example, if you receive a discount for getting multiple services from one provider, you may lose this if you switch just one service).

Changing Your Habits or Behaviours

Once you have checked all your bills are correct, and that you are only paying for what you really want to use, you need to start looking at your habits and behaviours.

These may offer some useful options for reducing your spending.

Start with your electricity, gas and water usage.

First, turn down your thermostat, both for the heating and your hot water. Hot water needs to be kept at 60–65°C (140–149°F) to avoid Legionella, but no hotter. You can turn the house temperature down to about 17.5°C (64°F) if you put on a jumper, especially if you are moving around. Also consider having your heating on for less time each day. If you all leave the house at 8am, it will be fine if the heating goes off at 7.45am, or even 7.30. It is unlikely to be cold by 8am.

Second, turn off lights and appliances when not in use. This is very easy, but can save a considerable amount of money.

Doing laundry is expensive, but you can reduce this by:

Making sure that your washing machine is always full. Never do a half-load. It is considerably better to wash a few things by hand, and then wring them dry, than to do a half-load. Alternatively, just wait until you have a full load. This is more economical for both water and electricity.
Washing at a lower temperature. Modern detergents are effective at 30 degrees, so there is absolutely no need to wash anything at 60 degrees, and certainly not any hotter. Use a maximum of 40 degrees, and then only if your clothes are really dirty. This is also better for your clothes, and they will last longer.
Avoid using the tumble dryer. If you must use one, limit the time it is on, and consider buying a more energy efficient model. Instead, dry things outside, or in front of a radiator.

You can also reduce water usage in other ways. For example, having showers is more economical than bathing, especially if you invest in a more efficient showerhead. Consider flushing the toilet only when it is strictly necessary. If you have a large old-style cistern on your toilet, you will find that it doesn’t really need the whole cistern of water to flush effectively. Placing a balloon or partially inflated football in the cistern will reduce the amount of water it takes to fill up, without affecting the flush.

If you have a garden, it is a good idea to consider harvesting rainwater to use for watering. Most houses have downpipes that can be diverted into a water barrel, and barrels are relatively easy to come by. Avoid watering your lawn from the mains (watering is, in any case, not advised by gardeners because grass is robust enough to grow back even after a period of drought).

Spend to Save

The final area for savings is ‘spending to save’, where you need to make an upfront payment—often large—in order to make savings. These options may not be open to everyone, but if you do have some spare capital, they can often pay off remarkably quickly.

Starting small, one easy area for savings is energy-efficient lightbulbs. These cost more than conventional lightbulbs, but also last a lot longer: sometimes ten times as long. They therefore pay for themselves very quickly. If you are having new lights installed anyway, consider investing in LED lights, as these are extremely energy-efficient, and therefore very cheap to run.

The second area to consider is insulation. Insulating your loft or roofspace can quickly pay for itself, as rolls of insulation are not very expensive, and putting it down is not a technical job. You can therefore do it yourself relatively easily. A more expensive option is installing double or secondary glazing. This pays off over time, and also reduces the noise levels, so you may find that it is worthwhile. You can also do it one window at a time, whenever you have enough money.

The final area that you might want to consider is energy generation. Solar panels have become much more affordable recently, and so have the batteries required to store energy. If you live in a relatively sunny area, you may therefore be able to generate enough energy to meet your needs without having to draw much from the grid. You can also get paid for feeding energy into the grid, making your solar panels a real asset.

Electric vehicles are also looking increasingly like an option for supplying home energy too. There are trials in several areas on feeding energy from car batteries into the grid. This is not yet widely available for domestic premises—but it is probably only a matter of time.

A Final Thought

Not all these options will work for everyone, or even be available to all. There may also be other options that you can identify, which work better for you.

Whatever you try, take pride in reducing both your bills and your impact on the planet.

Continue to:
Reducing Your Outgoings / Spending Less
Top Tips for Building up a Savings Pot