You may consider your home to be your humble abode, but its running costs might not be so humble. After all, household costs have increased by 55% over the past decade to £9,393 a year for the average family, as revealed by Moneywise.
Given such expense, it’s wise to think long-term. Building up your savings or taking out life insurance are couple of ways that could help your family to deal with household expenses if your family did experience a sudden change in finances.
Similarly, MoneySavingExpert.com‘s Martin Lewis recommends having three to six months worth of emergency savings at the ready to help your family cope in the event that you or your partner were to be made redundant.
Breaking your monthly expenses down into categories can help you to decide what sum might be required. The following figures might be a good starting point:
Monthly mortgage and maintenance costs
According to research on Channel4.com, average monthly costs for owners of a typical three-bedroom house in June 2012, including mortgage payments and household maintenance and repair costs, were £600.
Moneywise lists the following other average outlays from 2012:
Phone, internet and TV bills
Bargain bundles with TV, broadband and internet can soon add up. Opening rates can often revert to the standard price after a set number of months with the result that a monthly bill of £50 can soon rocket to at least £80. You may also incur further costs, if you dial premium rate numbers or add speciality channels.
Escalating energy costs can be a financial thorn in the side of homeowners, with average annual expenditure costing over £1,322. However, the Energy Savings Trust reveals that you could save up to £175 a year simply by insulating your loft. Additionally, forming more sustainable energy habits may also support you reach long-term savings goals.
Maintaining a home, especially a house, is little like painting the Forth Rail Bridge; it can be a never-ending process. Maintenance and repairs can cost £717 a year, and be a drain on any income. Additionally, you might be surprised at just how much it costs to keep your house looking spic and span. Did you know that cleaning products alone can add up to £163 a year on a shopping bill?
Another biggy. Council tax has increased by around £502 over the past 10 years. However, if you have a change in circumstances you may be able to apply for a discount if you are left alone or are in full-time education.
Weaning the little darlings is arguably the largest household cost of them all, particularly for those on a single income. Alarmingly, it can cost up to £10,400 a year, £865 a month or £28.44 a day to bring up a child. These figures factor in everything from food and clothing to after school club and nursery fees.
So, there you have it – just a few figures to mull over. By breaking down the overall cost of running a household into each component expense, it may be easier to spot where savings can be made. Additionally, by taking a long-term approach, you can start building a safety net in case the unexpected happens.
This guest post was written by Andy Moore on behalf of Money Matters, the Sainsbury’s Bank blog. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions. Sainsbury’s Bank accepts no responsibility for the opinions and views of external contributors and the content of external websites included within this post. All information in this post was correct at date of publication.