Money-saving tips

Personal finance expert and mum of three, Rosanna Spero, comes to the aid of one family who are strapped for cash.

 Mums' Choice member Carol Cabourn-Ford with her husband Jamie and daughter Mabel, 13 months

Having children is an expensive business – one survey put the bill at a whopping £193,772 to raise a child from birth to the age of 21. That’s the equivalent of some £769 a month! All this extra expense, plus the possible loss of one income, means that time spent reviewing the budget will be time well spent for any family.

When mum Carol Cabourn-Ford got in touch we were keen to help. Dad Jamie works as a teacher, but Carol gave up her job as an office manager when Mabel, now 13 months, was born. “We have no spare money and it is a struggle living on just one income. Jamie and I have not been out since Mabel was born.”

Rosanna Spero has examined the family’s finances to potentially save them some £1,500 a year.

Rent or mortgage

Carol is lucky that her flat only costs her £300 a month, as her father is her landlord. But for people with a mortgage it is worth looking at current deals to see if you can cut costs. Top deals are available to people with a deposit of 20% or more and you can fix at less than 5% for five years. So £100,000 borrowed with a 4.99% five-year fix will cost you £584 a month paying back both capital and interest. If you have a smaller deposit of say 10%, rates will be higher at around 7%, so it may pay to stay on your current lender’s variable rate.

Go to comparison sites such as www.tescocompare.com to find the best rates as they change frequently.

Utility bills

You can save hundreds of pounds a year by switching providers. Carol currently pays £69 a month to British Gas for her gas and £44 a month to EDF Energy for electricity and has never switched. But a quick search shows that she could save a whopping £351 a year – more than
a quarter of her current bill – by switching to npower’s Online 17 Dual Fuel tariff. Carol also pays £30 a month for Sky TV and broadband and £13 a month to BT for her landline. Amalgamating the three could save money. Sky would cost a fixed monthly £28.50 and Virgin £29, plus the cost of calls.

Contents insurance

The internet again is an invaluable tool in cutting costs on your home contents insurance. Websites such as www.tescocompare.com let you scour the majority of the market. To work out how much contents insurance you need, go round room-by-room adding up the cost of replacing the contents. Carol pays £24.63 a month for £64,000 of cover, which is far too much for her two bed flat. She could cut this to £10 a month for £30,000 of cover.

Wills

Once you have children it is vital to write a will – which costs about £100-£150 – setting out who gets your belongings and more importantly, who will look after your children if you die. Life cover could provide your family with a cash sum to meet immediate expenses or to provide money for the future. It would cost as little as £5.50 a month for £50,000 of cover for 20 years for both Carol and Jamie. Tesco Bank offer Tesco Life Insurance, you could get a quick quote today.

Debt

Carol has a permanent overdraft of more than £2,000, which costs her £25 plus a month through her Lloyds TSB Classic account. Switching to the Alliance & Leicester Premier Current Account could save her as much as £389 a year in interest. If you are in debt and struggling don’t ignore it. Talk to your bank or mortgage lender and explain your situation. They may let you take a payment holiday, freeze the interest or even reduce the debt. If you can, transfer debt onto an interest-free credit card: Tesco currently has 0% interest for six months on balance transfers – which will give you time to pay it off

Shopping

All retailers are offering big discounts to help you save money. Tesco has fantastic money-saving deals, including regular promotions in the Baby & Toddler aisle. You should
also sign up to websites such as www.myvouchercodes.co.uk, which offer discount vouchers for a huge number of shops and restaurants.

Benefits

The State does give some help to mums. Carol gets £80 Child Benefit a month but she does not currently claim Child Tax Credits. On her family income she could receive an extra £21 a week. Contact the tax credit helpline on 0845 300 3900 to see if you are eligible for help, or visit www.entitledto.co.uk.