All the economic signs suggest that homeowners should brace themselves for a tough 12 months. Time to batten down the hatches? Then start with these basic money-saving measures and steer your finances away from stormy waters. If you're already in debt, click here for sound advice. By Caroline Bloor
If you're not sure where the money goes every month, use the 4homes money planner first to raise your awareness about your spending habits. But, if you have savings, use them to pay off your credit card debt.
Research shows that many people who owe money on their credit cards are also saving for a rainy day. David Kuo, Head of Personal Finance at Fool.co.uk says, 'It makes little sense to have a stash of money earning interest at six per cent a year when a pile of debt is burning a hole in our finances at 15 per cent annually.'
If you don't have savings but do have credit card debt, switch to a 'life of balance' deal where all the debt moved stays at the cheap rate until it's repaid. Pay off as much as you can each month and don't use this card for spending. Compare deals by going through price comparison websites.
Whilst the market is a bit tricky, you're not likely to re-mortgage unless you have to. If your existing fixed rate, capped or discounted deal is coming to an end in 2008 or you are on your lender's standard variable rate - that means you! Talk to your existing lender first -it could result in a better deal for minimum effort.
With stricter lending criteria and increasing application fees, switching is unlikely to be cheap this year. For impartial information, use the Financial Services Authority's own comparison site (Money Made Clear) to compare deals. Also seek advice from an independent mortgage broker (visit Impartial.co.uk to find a local one). Remember to weigh up the cost of any exit, valuation and legal fees against the potential savings.
Don't forget, if you have a flexible mortgage that allows you to make overpayments when rates are dropping, you should be able to take a payment holiday if things get tough.
If you live alone or don't use much water, you could save as much as £200 a year by getting a water meter installed. To find out if you'd benefit, visit uSwitch for a calculation or contact your water company.
If a meter would benefit you but it's not possible for you to have one, ask to start paying the Average Household Charge instead of the usual charge based on the rateable value of your property. This will be cheaper.
Energy bills have risen 60 per cent in the last five years. There are around 230 gas and 160 electricity tariffs on the market, yet almost half of us never shop round for a more competitive deal. 'Switching to the best deal for your energy consumption could save you as much as £320 each year,'says Michelle Slade from Moneyfacts.co.uk.
So grab the consumption figures off your last bill, find out what tariff you're on and see how much you could save. Run your details through at least two comparison sites to make sure you've got a fuller picture.
Boost the saving by paying on a fixed monthly direct debit and/or signing up to an online tariff.But before you switch, check whether now's a good time (or whether suppliers are about to up prices again). By far the easiest way to do this is by checking what the switching 'traffic lights' are on at consumer champion Martin Lewis' website Moneysavingexpert.
