1. Maintain emergency cash savings. Ideally, this would be sufficient for 6 months without work. To build up an emergency fund, make saving a priority and think carefully about spending
2. Talk to your Mortgage Lender, before problems emerge. They may be able to help offer a temporary respite.
   Consider an interest only mortgage. Although it is not a good solution in the long term, it will provide a temporary reduction in interest payments.
3. Earn More. Could you take a lodger in? A spare room could make a profitable way to easily earn more money. In some areas the income from a lodger can pay for 50% of your mortgage. This is an effective way to avoid repossession.
4. Take Independent Advice from Debt Advice bureau’s and Citizen’s Advice Bureau’s they may be able to offer practical steps to avert repossession.
5. Reduce all unnecessary outgoings. Look at each bill and think whether you could make savings or whether you need it at all. Look at ways to reduce cost of running a house
6. Use an Isa Saving account to make the most of interest savings
7. Take out Payment Protection Insurance PPI or Mortgage payment protection Insurance MPPI to cover repayments in the event of an emergency
8. Check to make sure you would actually be covered for a pay out. Sometimes payment protection insurance schemes may not payout for certain circumstances like the self employed.
9. Short term income protection will help you to cover all your bills.
10. Sell possessions. A bit drastic but perhaps there are some possessions that you don’t need very much.

Live With Relatives

This will make the biggest difference to saving money. When you live with your parents, you could save £100s a month in rent payments. Whether this is the easiest way to save money depends on how much your personal freedom would be restricted by living with your parents. But, expensive house prices are making many young people consider living with their parents for longer; don’t worry about any stigma of living with your parents. If you really want to save money this may be the most effective way.

Spend What You Need Not what You Feel Like

It is easy to get into the habit of spending because it is there, rather than buying the things that we really need. If we spend time in our favourite shops, invariably we will be attracted to spending money. If you only go shopping with a clear mind with what you really need it can enable big savings.

Live Simply

If you get into the mode of living simply, you can learn to enjoy a frugal lifestyle. This does not mean we have to become a miser. It means we realise happiness is not just dependent on the accumulation of material things. When we live simply, we don’t aspire to accumulate things for the sake of it. Rather than buying expensive brand names, choose products / clothes which are just as good, but without an expensive brand name.

Cut Out Unnecessary Regular Spending Habits.

Some things in life are quite cheap. A takeaway coffee may be between $3-$4 dollars, therefore, we think there is no harm in buying it. However, if we buy it every day of the week and occasional buy a pastry as well. It can soon add upto $35 a week. This can equal $1,500 a year. Furthermore, if this was used to invest or pay off debt, the value would escalate. In a few years, the savings from coffee, alone, could make a significant contribution to saving for a house. Sometimes we can make big savings by making small changes.

Be Willing to sacrifice Things.

Everytime we buy something, try to feel there is a real opportunity cost. If we spend on this, we can’t save for the house. With each purchase evaluate its importance and how much we really need it.

Save First

This idea is simple but effective. Make saving your first priority. Rather than waiting to see how much money you have left over, evaluate how much you much you need to save at the start of the month. If you have savings targets, it forces you to achieve them.

The Myth of Housing Wealth.

In the UK, one of the most popular topics at the dinner table is House Prices. Those who own houses, get great delight in talking about how much their house prices have increased. However, even though house prices in the UK have doubled in the past 7 years, people certainly don’t feel twice as better off. True, it is possible to remortgage and take equity withdrawal, but for most people rising house prices don’t help much. You could sell the house, but it is just as expensive to buy somewhere else.

The Benefits of downsizing in House Value.

For most people it is difficult to realise the monetary value of a house into their day to day living. Choosing to live in a less expensive house could improve your monthly disposable income very significantly. For example, if you downsize from a £200,000 house to a £180,000 house, your mortgage can be reduced by £20,000. At 6% interest, this will save you £121 a month on a 30 year mortgage term.

If you are a single person living alone, is it necessary to have a 4 bedroomed house? True, you lose some value of your assets, but you will not notice this. However, the extra £121 a month will make a big difference to your standard of living. Admittedly, there are various costs in moving house. But, the important thing is that when buying a house, don’t necessarily buy the most expensive you can. In the past, housing has been a good investment (may not be in the future short term) but if you buy the biggest house you can, you will suffer with high mortgage payments for 30 years. Choose the right house and you can make significant savings.

Other Posts 

Another way to reduce mortgage payments is to extend your mortgage term. See: Why I extended my mortgage term  to 47 years.

6 ways to get rich at  Money Walks, this weeks host for Festival of Frugality

Heating and air conditioning can be a big cost of running a house. Changing the thermometer by 1 or 2 degrees can make a big impact on fuel bills. As well as reducing the temperature you should also look at changing the timer. For example, make sure the A/C gets turned off when you go out of the house. If you are in the habit of forgetting invest in a good timer.

2. Investing in Low energy appliances.

Make an effort to choose appliances that use low amounts of energy. A good example of such an energy saving technology is new low energy lightbulbs. The can use upto a fifth less energy than standard light bulbs. Although they may be more expensive to buy, they will pay for themselves over the course of their extended life period. Also look out for special offers which offer discounted prices of these devices. Governments are increasingly looking to encourage the use of greater energy efficiency.

3. Switch to paperless billing.

Many companies now offer small discounts for receiving bills online and not in paper form. Although the discounts are relatively small, there is an additional advantage of less paper to file.

4. Search cheapest home insurance quote each year.

Even if one company is the cheapest one year it doesn’t mean it will always remain the cheapest company. The home insurance market is relatively competitive, but firms often take advantage of buyer lethargy. I.e. in other words insurance companies can charge higher prices to existing customers. Therefore, don’t loose out on potential savings on big insurance premiums.

5. Be Careful with Appliances.

Many household appliances can be used carefully to enable lower energy consumption, without loss of performance. For example, if you are making a cup of tea only boil enough water necessary. Quite often, people boil a full kettle it not only takes longer to boil, it also costs more money.