FOOL'S EYE VIEW
Make £5,000 A Year Online

By Cliff D'Arcy
August 4, 2005

I first started using the Internet in 1995, and spent thousands of hours surfing over the next ten years, with much of it completely wasteful!

Before joining the Fool, I worked in marketing in financial services, so the Internet quickly became my most useful work tool, especially when conducting research into rival companies and products. Thanks to the Web, I no longer had to slog from branch to branch when I carried out, say, a personal-loan survey. Having online access also made my personal financial planning much easier, because it enabled me to find Best Buy products quickly and simply.

That's why I believe that cunning use of the Internet could save a typical household a huge sum, say, £5,000 a year or more. As proof, here are ten ways to batter your bills with a few sessions of surfing!

Bash your biggest bills

1. Massacre your mortgage repayments

There are around 11½ million mortgage borrowers in the UK, who collectively owe a hefty £918 billion. On average, this comes to just short of £80,000 per household, which is the highest this figure has even been, thanks to soaring house prices. Indeed, even though interest rates are low in historical terms, our mortgage interest bill has hit a new high, thanks to massively higher borrowing levels.

Millions of mortgage borrowers (those not on a special-rate deal) are paying their lender's standard variable rate. Typically, this comes to about 6.75% a year, so the interest bill on an interest-only mortgage of £80,000 would be £5,400 a year, or £450 a month. However, by switching to a Best Buy fixed or discounted deal, you could knock at least 2% off this rate, making it 4.75% or less. This means an annual saving of £1,600 in the above example, or a 30% reduction in your interest bill! If your current lender won't offer you a better deal it's time to move on!

Check out the handsome home loans in our Mortgage centre.

2. Buy your next car for less

You don't need to be Jeremy Clarkson to get a big discount off your next car. Loads of websites are keen to help. Also, if you're not an experienced haggler, read these tips on beating the dealer. It's not hard to save, say, 15% off the list price of a popular model, which could save you upwards of £1,500. There are further savings to be had in Tremendous Tips For Motorists!

You'll find cheaper motor insurance and breakdown cover in our Insurance centre.

3. Slice the cost of holidays and trips

After spending on homes and cars, holiday and leisure spending is one of our biggest outlays. Whether you're planning a family fortnight abroad or a short stay in the UK, it pays to shop around before you book. This article explains how to save money before you book, when you travel, and when you spend abroad. Smarter holiday spending could easily save a large family a grand a year or more.

Become a better borrower

4. Avoid paying interest on your debts

If you pay interest on your credit and store cards, you're missing a trick. Millions of crafty borrowers have discovered the joys of using 0% credit cards. Dozens of cards offer no-interest introductory rates on balance transfers, with the longest deals lasting for up to a year. By transferring debts totalling £3,000 to one of these cool cards, you could slash your interest bill from, say, £500 a year to zero. Some people have even transferred overdrafts or personal loans onto 0% cards! Learn more in From 30% To 0% In Sixty Seconds!

Check out the deck of delicious 0% cards in our Credit Card centre.

5. Pick the perfect personal loan

The worst place to find a personal loan is in the high street, while the best place to look is online, because the Web makes it easy to compare the true cost of borrowing. Furthermore, don't go looking for a loan without reading Personal Loans Without Moans Or Groans, otherwise you could get stung for an extra £1,000 for every £5,000 that you borrow!

Check out the delightful deals in our Personal Loan centre.

Be a smarter saver

6. Earn more savings interest

Collectively, we Brits have a whopping £528 billion on deposit, which comes to an incredible £21,000 per household! However, we don't make this money work half as hard as it should. By switching your cash to a Best Buy cash mini-ISA (which pays tax-free interest, yummy!) or no-notice savings account, you could double your interest rate overnight.

You'll find several leading accounts in our Savings centre.

Batter more of your bills

7. Clip the cost of cover

We Brits spend around thirty billion pounds a year on general insurance policies, such as motor, household, travel and payment protection insurance. I reckon that shopping around online for Best Buy policies could cut the typical household's outlay on these policies by a third. This would mean a typical household saving of around £400 a year. Add in the savings made from finding cheaper life, income protection, critical illness and other health cover, and you're talking savings of a grand a year or more!

Prune all of your premiums with the help of our Insurance centre.

8. Attack your energy bills

This is one of the most obvious savings in the book, so why have two out of three households (nearly seventeen million homes) not switched gas and electricity providers? Fool Partner uSwitch calculates that a typical household could save £170 a year by finding cheaper tariffs or energy suppliers. Don't be afraid of switching, because there's no wiring or plumbing to be done: all you need to do is sign a form and let your suppliers do the legwork!

Get cheaper gas, electricity, water and heating cover from uSwitch here.

9. Trim the cost of talking and surfing

Although I still pay BT for monthly line rental, I make all of my UK calls through the wonderful call18866 service, which charges 2p for any UK call of any length at any time (higher tariffs apply for numbers beginning with 07, 08 or 09, and international calls). Thanks to this change, I reckon that my annual cost of calls will fall from, say, £160 to under £20, which is fabulous news! Don't stop at switching your home telephone service, though, as impressive savings can be made for mobile phone and Internet usage, too!

Pay less for home telephone, broadband and digital TV here.

10. Use the power of price-comparison websites

I always shop around to find goods and services at a discount to their recommended retail price (RRP). Of course, my favourite price-comparison and discount websites make this process a darn sight easier, with savings on everything from books and CDs to supermarket shopping. For example, a digital camera that I recently bought was reduced from £410 to £250 online. Wow, that's a saving of £160, or almost two-fifths (39%) off the RRP!

Finally, remember that reducing your bills by £5,000 a year is far more rewarding than earning an extra five grand, because you don't lose out to income tax and National Insurance contributions. Yippee!

More: Find better credit cards, personal loans, mortgages, savings accounts and insurance.