• By Malcolm Anderson
• Published 02/21/2012

While governments debate the merits of national austerity plans, with a few key measures each home can do their bit to effectively implement their own cost-cutting strategies.

From finding the best ISA rates to maximise your savings to cutting back on your energy costs, the following guide will give you some straightforward and relatively painless ways to save cash in 2012.

Entertain at Home

Instead of meeting friends at a pub or restaurant, you can save a significant amount by socialising at home. To be even more savvy, invite guests over for a potluck supper or arrange a rotation agreement where everyone takes turns at entertaining at their homes.

Use Energy More Efficiently

Nationwide, home heating prices have nearly doubled over the past six years and data released from the Citizens Advice Bureau suggests that as many as 40% of UK adults are struggling to pay their energy bills. Here are some tips to cut your home’s energy expenses while keeping warm:

· Fight the vampires – in this context, vampires are electrical appliances and gadgets that draw energy when not in use. For example, your television likely consumes £1 worth of power per month when it’s on standby, and these small costs add up. It’s advisable to also unplug your computer printer, your mobile phone and all other appliances when they’re not in use or are done charging.

· Choose energy efficient products – when buying a new plug-in product, opt for an item with the Energy Star seal since these are designed to use as little energy as possible. Have a look at the EU Energy Star database online for the makes and models of energy efficient products.

· Improve your insulation -if your home isn’t well insulated, you could be throwing more than £100 per year literally out the window. The Energy Saving Trust estimates that cavity wall insulation (i.e. foam that’s easily injected into gaps) can reduce your heating expenses by £110 annually, plus upgrading your standard loft insulation to extra-thick 270mm insulation can save you another £25. In addition, a government scheme called Warm Front assists low-income residents and pensioners in England with insulation improvements, glass-front fireplace installation and other energy-saving projects. You might be eligible for up to £6,000 in assistance.

Make the Most of Your Savings with an ISA

Like heat escaping from windows, pennies and pounds escape from bank accounts through taxes. Because ISAs (Individual Savings Accounts) carry an annual tax-efficient allowance, you can effectively protect your hard earned money from needless taxation. Currently, more than one-third of British adults have ISAs. Please do remember, the eligibility to invest in an ISA will depend on your individual circumstances, and all tax rules may change in the future.

There are two main types of ISA – the Cash variety which is the simplest, or Stocks & Shares ISAs which carry more risk (since your investments will be subject to the ups and downs of the stockmarket), but which nevertheless can deliver healthier returns. The value of investments can go down as well as up and you may get back less than you invested.

As from the 6th April 2012, your annual ISA allowance will increase from £10,680 in 2011/2012 tax year to £11,280 for the 2012/2013 tax year. You have the option of using this entire allowance by putting your investments into a Stocks & Shares ISA, or place up to £5,640 into a Cash ISA.

You can open an ISA for free and funds from a Cash ISA can be transferred into a Stocks & Shares ISA without penalty. While some ISAs allow you to withdraw your money at any time without penalty (instant access), ISAs are best used as long-term savings accounts.

Reduce Credit Card Fees

Do you have a credit card with high interest? With such strong competition amongst financial providers, there are some excellent deals to be had if you take the time to do a little research. In addition, if you have a good credit history, you might be able to request a lower interest rate from your provider in return for your ongoing loyalty. The difference of just a few percentage points could reduce your annual credit expenses by a significant amount.

Spend Less on Your Car

You might be surprised at how much money you can save by adjusting your car maintenance schedules, insurance plans and driving habits. Here are some tips to get you started:

· Change the oil less frequently – oil change shops tend to push too-frequent oil changes, so it’s a good idea to check your car owner’s manual for the manufacturer’s recommended oil change schedule.

· Shop around for insurance – insurance rates vary significantly among companies. By taking the time to compare rates, you could save hundreds of pounds per year. Also, if you have an accident free driving record, you might be able to renegotiate a better deal with your current provider.

· Keep the tires properly inflated – make sure your tire pressure is appropriate as this will give you better fuel economy, reduce tread wear and lessen the likelihood of a blowout.

· Trust an independent garage – independent garages tend to charge less than dealerships when making repairs or performing preventive maintenance. To find a trustworthy certified mechanic, it’s wise to ask your friends or family for a referral.

Conclusion

The above article describes some top ways to save money or stretch your personal finances further. From researching finding the best ISA rates to take advantage of their tax benefits to cutting your vehicle costs, minor changes can make a major difference.

About the Author: Malcolm Anderson is an independent journalist writing about ISAs.