Finance Choices
The £11,000 cost of household bills
The average UK household spends £11,000 a year on bills, new research reveals, but Britons are underestimating this cost.
Online bank Egg finds that the largest cost the average household faces each month is for mortgages or rent - which use up £611 - followed by council tax (£109) and telephone bills (£34).
Home insurance, gas, electricity and water bills, along with other essentials such as television licences, all cost over £20 a month.
This all adds up to an expenditure of £888 a month, or £10,656 a year, Egg calculates.
But despite this heavy expense, most Britons believe they are paying far less than this.
"The average consumer believes their home costs 30 per cent a month less to run than it actually does, which often results in failure to budget appropriately and as a result, regularly overspend," said Mark Nancarrow, Egg?s chief financial officer.
This miscalculation can lead UK households to believe they have £300 more a month than they think to spend.
"It is clear that many consumers are unsure how much discretionary spending money is at their disposal each month. However, in order to budget effectively it is important that consumers think about their money as being in one of two pots ? money which is committed to regular bills, services and costs and money which is leftover for discretionary spending," Mr Nancarrow added.
"Only by understanding these two separate pots - how they operate and what they cost - can we ensure that we stay in control of our money and avoid overspending and unnecessary fees and charges from our banks."
To see if you can save money on your mortgage, go to www.financechoices.co.uk/mortgages.html
Online bank Egg finds that the largest cost the average household faces each month is for mortgages or rent - which use up £611 - followed by council tax (£109) and telephone bills (£34).
Home insurance, gas, electricity and water bills, along with other essentials such as television licences, all cost over £20 a month.
This all adds up to an expenditure of £888 a month, or £10,656 a year, Egg calculates.
But despite this heavy expense, most Britons believe they are paying far less than this.
"The average consumer believes their home costs 30 per cent a month less to run than it actually does, which often results in failure to budget appropriately and as a result, regularly overspend," said Mark Nancarrow, Egg?s chief financial officer.
This miscalculation can lead UK households to believe they have £300 more a month than they think to spend.
"It is clear that many consumers are unsure how much discretionary spending money is at their disposal each month. However, in order to budget effectively it is important that consumers think about their money as being in one of two pots ? money which is committed to regular bills, services and costs and money which is leftover for discretionary spending," Mr Nancarrow added.
"Only by understanding these two separate pots - how they operate and what they cost - can we ensure that we stay in control of our money and avoid overspending and unnecessary fees and charges from our banks."
To see if you can save money on your mortgage, go to www.financechoices.co.uk/mortgages.html
posted by Barbara Gordon at 9:13 AM
The £11,000 cost of household bills
5 Comments:
I keep a spreadsheet of all my monthly bills, so I can tell you to the penny - I spent $27,534.48 this year. (This includes Dec. bills)
This is made up of mortgage, insurance, and utilities. This does not include any credit card or cash spending. Simply the necessities. My car is paid off, so the only car expense included in this number is insurance.
I definitely wish it were lower!!! This is the first year I kept track like this. I easily would have underestimated...
This is really a great blog, I'm glad I found it! I wanted to ask you if you have been marketing your website on forums? It's a great way to get traffic and build your reputation. We have a new personal finance forum and we'd love to have you as a member. Please come and share your expertise!
http://www.manageyourdollars.com/talk
If you use a spreadsheet to track all incoming and outgoing funds then you'll know exactly what your expenses are and there's no estimation needed. The first step to optimizing your cash flow is to know in detail where your money comes from and where your money goes.
No spreadsheet here but according to my totals:
$15,000/yr. Home (4 flat) and (1) car are paid off. For the home we pay the entire gas utility for all units as well as garbage pickup, water, lawn maintenance, and common area electric. Add in property taxes, homeowners insurance, flood insurance, umbrella policy, etc.
The rest is car insurance, medical insurance(s), long term care insurance, medical deductibles and co-pays and drugs. Oh yeah, phone and satelite(sp).
In retrospect, not bad, but it can always be better.
WAY WAY TOO MUCH I CAN TELL YOU THAT My house payment is $500 a month my electric is $150 a month cable includes internet is $100 a month & water is $75 a month & then gas for my car probably $75 a month preschool tution $65 a month dh's truck payment almost $400 a month insurance for both cars $100 a month cc bills probably $800 a month but I charge everything then pay the bills each month for rewards. then the phone is $45 a month gas for dhs truck probably $200 a month, & groceries way way too much!!!
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