The recession means money is tight and we're all worse off...doesn't it? New figures show that in reality, the average person has nearly £500 more in their pocket than they did last year.
Even though living costs like food and gas & electricity bills have gone up, an average salary increase of 3.6% or £1217 in 2008 means many of us are better off than we think - something that might come as a surprise if you're feeling the pinch.
Now's the time to make the most of your money, and a few simple changes could give you more cash to play with and help you to weather the financial storm, so read on for our top recession-beating tips.
Gas and electricity bills up £180 - switch today to save £425
In 2008, utilities bills rose by an average of 19.3% for gas, 19.1% for electricity and 6.3% for water. Salary increases were quickly swallowed up by the increased running costs of your home.
Now it's 2009 and gas and electricity prices have come down again. However - it's important to realise that the price cuts we're seeing from major suppliers are only minimal when compared to the rises in 2008. There is also no guarantee that any further price cuts will be made this year, leaving you only slightly better off.
But it's not all doom and gloom - you could still save up to £425¹ on your gas and electricity bills by comparing your supplier and switching. See how much you could save by entering a few quick details into our gas and electricity calculator - it only takes a few minutes, and we will tell you the cheapest energy supplier and plan for your area.
If you're feeling unsure about switching, then read our guide to switching for everything you need to know about the process. You could also check our 'Is it the right time to switch?' article for a roundup of this year's price cuts and what they mean for you.
You could also save money on your water bills by having a water meter installed. Try our water calculator and find out if you could save hundreds with a water meter. Generally, if there are more bedrooms in your house than people, you could save money with a meter.
Food bills up by over 10% - find out how to save on everyday spending.
The average food bill has gone up by a shocking 10.3% to £2,847. Food is the biggest household expense, and despite attempts by supermarkets to drive down costs, we are spending more than ever.
To cut your food shopping bill, as well as switching to own brands, or changing to a cheaper supermarket, make sure that you are making the money you spend work for you. Think about paying for your everyday shopping with a cashback credit card or reward credit card, rather than with cash or your debit card. If you pay off your bill in full each month, you will avoid paying any interest, and could save yourself some money.
Try the American Express Platinum cashback credit card - for the first three months you earn 5% cashback on your spending (up to a maximum spend of £2000) and then after that you earn back between 0.5% and 1.5%, depending on how much you spend.
Another option is the Egg Card. You can get cashback or discounts on purchases at a range of retailers, for example 5% cashback at travel website lastminute.com and 20% off at buyagift.com. Find out more and apply now.
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Swap cigarettes and alcohol for life insurance
The recession is not letting up just yet, and many people are cutting back on their spending by cancelling their life insurance policies. If you're one of them - then think twice before you cancel your policy.
In 2008, spending on cigarettes and alcohol decreased by 0.4%. It might not sound like much, but it's the first year since 2000 where spending in this area has actually gone down. And did you know that if you've given up smoking for over a year, the cost of your life insurance could go down?
In fact - life insurance is the cheapest it's ever been. In the current economic climate, your family might need the protection that life cover affords more than ever.
If you're not sure what kind of life insurance could be right for you, read our life insurance guide for information about each type.
If you already know what sort of cover you need, why not get a life insurance quote today? Buying one less packet of cigarettes a month could afford you a policy that's enough to protect your family should the worst happen.
However if you've already got a life insurance policy, check the policy details carefully before you switch. A plan taken out in the past could cover you for more situations than a plan of the same price today, and in some cases, you might not be able to find the same level of cover with any new plan.
Saving slows - find a great rate and buck the trend
Despite the increase in household income, the majority (86%) of us are saving the same amount or less than we were 18 months ago, when really, in such an unstable economic climate, we should be saving as much as we can.
With interest rates falling, it might seem that saving isn't really worth it, but there are plenty of savings accounts on the market offering good rates. Don't forget to use your cash ISA allowance - you can save up to £3,600 tax-free every year. It's a good idea to use up as much of your cash ISA allowance as you can early in the tax year. If you put your full cash ISA allowance of £3,600 into a typical account paying 2.5% AER at the start of the financial year, over 12 months you'll earn £90 in interest. Leave it to one month before the deadline, and you earn just £7.42 in interest.
Spending on communications sticks - save hundreds by switching
Average household expenditure on products like home phone, mobiles and broadband has gone up by just £2 on 2008, however that's no reason not to switch. If you don't have the best deal for your needs you could be spending hundreds more than you need to - so it could pay to compare all your communications products.
Cost of insurance up 2.6% - save £200 on insuring your car
The average household is spending 2.6% more on insurance than they were in 2008. Insurance is an area where it doesn't pay to take the risk of skimping on cover - particularly when it comes to your car. However, you could make savings of up to £200² by comparing car insurance and switching to a cheaper policy.
¹Between 1st August and 26th November 2009, at least 14% of people who switched energy supplier with uSwitch.com saved £425 or more
² At least 10% of people who switched car insurance provider with uSwitch.com between 3rd June 2009 and 30th November 2009 saved £200 or more.