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Man with bills

Are you losing out by underestimating your bills?

It’s easy to underestimate things – the calories in a slice of cake, or how long your journey will take for example. But not considering the full amount of your household bills could end up costing you much more than you think.

Bill payers estimate their annual household bill costs to be £2,528, but in reality they spent an average of £3,987 according to research from Santander Current Accounts. This is a difference of £1,459 a year. Would you know where you could find this money if you did misjudge your costs by this much?

The largest discrepancy were for TV, phone and broadband outgoings, with households estimating annual spend to be 53% lower than actual costs.

One in four (25%) admit to borrowing money or raiding their savings in order to pay their bills, and 6% claim they often do not have enough or never have enough to pay their bills.

Although these figures may sound worrying, there are some simple things you can do to make sure you don’t end up short.

Make paying for bills easier

Budgeting and knowing how much money you have is key to making sure you have enough to cover yourself.

The research showed three in ten (30%) of bill payers admitted they do not read their bank statements thoroughly, while one in 20 (5%) do not even open their statements.

It’s easy to get into the habit of not checking your statement. Get yourself organised and keep track of when your bills need to be paid, and check them regularly – this makes it easier to spot mistakes, and any trends with when you tend to be spending more.

Once you know how much money you need to pay your bills with, you can set this money aside. If you’re finding it hard to find this money, using our Budget Planner can help you see where you could cut back.

Think about how you’re paying your bills

You should also think about your method of payment. Direct Debit is often the cheapest and easiest way to pay, but there are other options, such as by cheque or at the Post Office.

If your bills are getting on top of you, don’t bury your head in the sand. It is always worth talking to the people you owe money to – you may be able to pay smaller repayments until your financial position improves, for example. There are also many free, confidential places you can go for debt advice if you need to.

Pay less on your bills

It is also always worth setting aside some time to see if you could be paying less for your bills.

There are ways you can cut a range of your bills, including Council Tax and utilities. Check you’re in the right Council Tax banding and are not inadvertently overpaying. Switching energy suppliers could also be a good idea to put money back into your pocket.

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