How much of your income do you have left over after bills and essential expenses each month? Chances are, it isn't a lot, with research from Scottish Friendly revealing that the typical consumer spends 66% of their monthly income on essential bills and outgoings.
The figures show that rent or mortgage repayments were by far the biggest drain on the budget, accounting for an average of £437.90 per month. Next up was food costs (£212.81), followed by monthly finance repayments (£145.89), which could include the likes of credit card bills or loan repayments.
Other essential expenses included things like utilities (£90.10), car insurance (£57.10), car tax (£29.63) and broadband (£28.01), as well as seemingly small expenses such as commuting costs and TV subscriptions – they all add up, and ultimately could take up a huge chunk of your everyday finances.
Despite 74% of respondents regularly seeking ways to cut costs, the figures also revealed that 42% believe they're not able to save any money on their monthly expenditure. However, this may not be the case, because there are actually plenty of things you could try to reduce your outgoings.
First up, you'll want to take a look at your utility bills and insurance policies. If you've never considered changing provider, then now could be a great time to do so as you could well save money, so use our comparison tools to see how much lower your bills could be. Even things like mortgage repayments could be reduced – if you're on a lender's standard variable rate it's high time you remortgaged to a low-cost fixed rate deal, and if you're coming to the end of such a deal, make sure you compare the options to find an alternative.
"Not surprisingly, most of our income is spent on essentials like the mortgage or rent, commuting, food and utility bills," said Calum Bennie, savings expert at Scottish Friendly. "But it is concerning that even though people say they'd like to save money on their bills, so many feel they can't. By just taking a little bit of time out of the day, simple things like renegotiating with utility or media suppliers can save families considerable sums of money on household bills."
Performing a few comparisons could be a great way to lower your monthly expenditure, and you may find that you've got more than a third of your income left over at the end of the month. Then all you've got to do is decide what you want to do with all that extra cash!
Scottish Friendly's study found that 35% of people would put any extra money into their savings, and this could be a very wise decision. It's always sensible to have money put aside for a rainy day (an emergency fund can be a real lifesaver), or if you're saving up for a big purchase, those extra pennies and pounds saved here and there can soon add up. Just make sure you find the right savings account to squirrel away that extra cash and you could build up your pot before you know it.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.