How To Increase Your Disposable Income

In a climate of rising prices and stagnant incomes many consumers are facing the unwelcome situation of declining disposable incomes. Furthermore, high levels of debt and the prospect of rising unemployment leaves many of us in a difficult situation.

These are some tips to save money and increase your disposable income.

Look at Your Biggest Expenses First

To save real money, it is always worth starting off with our biggest expenses first. These will be your mortgage, rent, insurance premiums, petrol. Evaluate each expenditure and examine possibility of cutting the cost. For example, with your mortgage make sure you are not sticking with your existing firm out of loyalty and paying too much. Even in the current climate it is worth trying to remortgage. Save 5% on your mortgage and you may find an extra £50 a month. Save 25% on toothpaste and you may find an extra 20p a month.

Don’t spend out of habit.

A good way to save money is to forget all your typical expenditure and start from scratch - working out what you really need and want. Some of your bills are essential like rent, gas and electricity. But, you may feel that the cable tv is not necessary or magazine / gym subscriptions that are rarely used. This approach enables a spring cleaning in your spending.

Minimise Use of utilities.

With gas and electricity prices rising, it is even more beneficial to try and cut unnecessary electricity and gas. Some simple but effective tips to save on monthly bills include:

• fill kettle to minimum
• use energy saving lights
• don’t leave equipment on standby
• Reduce temp on heating and air conditioner.

Avoid Comfort shopping

A growing phenomena is for people to use retail therapy. It is easy to get into habits of buying clothes and goods we don’t really need because shopping has become a hobby. If you fall into this category, create a new hobby other than wandering around shops. If we spend just time browsing, we invariably end up buying what we don’t really need. Be strict and only buy goods that we really need. If you are unsure, wait a day before buying. If you really like it you will want to go back and get it. (Avoid overspending)

Reducing Petrol / Gas consumption

There are many ways to reduce the amount we spend on petrol. Petrol accounts for a growing % of people’s disposable income. Saving 10 - 20% here will make a big difference. The easiest ways to save money on petrol include:

• Cycling / walking to work
• Driving more slowly with less acceleration.
• Ensuring car is well maintained, right air pressure e.t.c