Becoming Chancellor of your own affairs

A TENSE George Osborne stammered out an austere budget yesterday. While he might have offered a handful of business friendly measures, he didn’t have much to say for high earners. With inflation soaring and real income flat, everyone is feeling the squeeze. Now then might be the time to appoint yourself your own Chancellor and to cut back your domestic expenditure. Here are a few things to consider.

Scaling back can only start when you know where it’s going. Thankfully technology can help us out. Everyone can download for their computer. The programme spins your spending into daunting charts and graphs that force you to take a closer look at your little indulgences. There are also iPhone and smartphone apps that you can download. The Pennies app, for example, lets you enter your spending on the move.

Watching your cash will no doubt expose the areas where you need to cut back. You’ll be shocked by how much you spend on life’s little habits from cigarettes to posh coffees and prepared sandwiches. The Office of National Statistics reckons that the average smoker spends a jaw-dropping £1,370.22 a year on cigarettes and rough calculations show that buying a Starbucks latte a day will end up costing around £575 a year. Of course, cancelling the unused gym membership is a must. The average gym membership costs around £600 a year – that’s £50 a session if you only go once a month.

Going green not only uses less energy, but will also save you cash – and quite a lot of it, in fact. If you get the tube to work, cycling could save you £1,000 a year. Insulating your loft could save you £205 a year on heating bills after the first 12 months, according to the Energy Saving Trust. Even very basic things like switching to energy-saving light bulbs, shunning the tumble dryer and turning off appliances will save you £50, £45 and £37 a year respectively.

Kevin Mountford, head of money comparison website, claims that many households could save over £2,400 a year just by switching to better bank and utility deals. For example, Mountford’s research shows that those who switched and bundled together their broadband, phone and TV services in the last 12 months saved almost £200 – some saving as much as £320 a year. Even simple things such as moving your current account and savings could give you a little rates boost. Given the fact that the Bank of England’s base rate is just 0.5 per cent, some of the offers at the moment look quite appealing.

Making the most of your assets isn’t a bad idea either. Schemes for renting out a spare room or even your entire house are becoming more popular. for example is already pairing up renters and rentees for the Royal Wedding and the Olympics. Other sites such as help you get a better price when selling off things on eBay.