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Families Plan Year's Budgeting

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Many families who cut their spending back through 2009 on the assumption of recovery in 2010 may already be having a rethink, and looking for fresh ways to prune their budget.

Unemployment could hit 3 million by mid-summer, says the Chartered Institute of Personnel Development (CIPD) - partly because of rising inflation and the rise in VAT. Counting the pennies this year could be more important than last.

“People should review their finances on a regular basis and the new financial year is a great trigger to do just that”, Says Clare Francis at moneysupermarket.com.

“For those suffering an extra financial hangover from the festive period, recovery will be quicker in 2010 if significant savings are made”.

Ms Francis estimates an average household could save £4,000 a year- simply by getting the cheapest deals in those areas of spending which few of us can avoid, like mortgage repayments and energy bills.

Here’s ten spending checks which any household can make:

1. Mortgages - use low interest rates to overpay your mortgage, while ‘interest only’ borrowers who switch to capital repayment terms with their current lender may be surprised by savings in the long-term.

2. Get the cheapest loan - Nationwide BS thinks many consumers with debts spread across credit and store cards, overdrafts and loans could make a big saving by consolidating the debts into its new personal loans costing a typical 7.6% APR on £7,500-£14,999 for up to five years, the rate being fixed for the full term of the loan.

3. Credit cards - if you can get your current card debts accepted for a 0% balance transfer deal, there’s a case for cutting the card up at once as you pay down the debt to ensure you don’t make new purchases, possibly charged at 16% upwards.

4. Be a careful shopper - write down what you actually need before entering the supermarket, and you can easily save £20 per week and avoid food waste, says Andrew Hagger at Moneynet.co.uk.

5. Home and motor insurance - comparison site Gocompare.com reckons a potential 21 million drivers are missing out on cheaper cover. Also, only 19% of consumers switched their home insurer in the last year.

6. Claim all available benefits - if family income is less than £40,000 and both partners work 16-hours a week plus, you’re eligible for childcare tax credits worth hundreds of pounds towards the cost of childcare, assuming the carer is registered with Ofsted.

Government helpline: 0845 601 4771. See also the website:

www.moneysavingexpert.com/childcare

7. Current Account - A&L, part of Santander Group, re-introduces its popular £100 cashback for those switching to its Premier Current Account. Other perks of this account include a fee-free agreed overdraft for 12 months, free annual European travel insurance and 0.5% credit interest, on condition at least £500 is paid into the account each month.

Enquiries: 0800 100 800 and online at:

www.santander.co.uk.

8. Start saving for next Christmas - Yorkshire BS is launching a 2010 Christmas saver account, branch based and postal, paying a fixed rate of 3.50% gross on a minimum £10 deposit. The account will take a maximum £1,200 - with instant access on December 1, putting savers in the black for next year’s Christmas spending.

For savers prepared to set aside £250 per month, moneysupermarket tips the Norwich & Peterboro’ BS Family Regular Saver, paying 5%.

9. Energy bills - obvious ways to save, says Will Marples at comparison service uSwitch.com, include paying by direct debit, switching to duel fuel, and signing up to an online plan which are around £300 a year cheaper than standard energy plans.

10. TV, telephone & internet - Moneysupermarket.com reckons bundling your TV, landline and broadband connections can save around £130 a year, compared with the cost of standalone products.

Information: Unbiased.co.uk, which promotes the benefits of independent financial advice, has launched a new Financial Calendar to help consumers plan their payments and spending. It can be downloaded for free at:

www.unbiased.co.uk/financial-tools/financial-calendar/