The expenses you would never cut

Despite the tough economic climate, many families are still spending on holidays, TV and takeaways, even though they can’t afford to save.

That’s according to a new report from Aviva, which has found that three-quarters of families admit there are cutbacks they refuse to make, even though doing so would help them save more.

Generally speaking, it’s a good idea to have at least three months’ worth of salary saved up as an emergency fund. Yet research from First Direct shows that 28% of households have less than £250 in accessible savings.

With average monthly outgoings of £1,536, that means that many households would struggle to make it to the weekend on their savings safety net.

Unacceptable cuts

Aviva asked 12,000 couples, both with and without children, what the main cuts they refused to make were; the top five were pets, summer holidays, pension savings, life insurance and heating their home.

Of course, it’s understandable that people are unwilling to give up pets, which are often seen as family members. That’s despite the expense – check out my article ‘How much has your cat cost you?’ for an eye-watering figure.

And it’s good news that people are prioritising saving for their old age and protecting their families – there are some cuts that aren’t sensible no matter how tight it gets.

But there were some surprising results too. The survey showed that people were unlikely to give up small but regular luxuries such as takeaway coffees and buying breakfast on the way to work.

Ditching these expenses is sometimes easier said than done, so read our article ‘Financial advice we all ignore’ for some tips on keeping the cost as low as possible instead.

[Related link: Are you overpaying for life insurance? Check now]

Pennies I struggle to pinch

This got me thinking about my ‘must-haves’ - the things I buy that aren’t a priority but that I’d be really unwilling to cut back on. What do I spend that I could save?

My first thought is the gym. Whenever I mention it as a monthly cost, someone comments about how it’s a waste and I should just go for a run outdoors.

But the image of me turning purple as I slowly jog around the neighbourhood makes me wince. I have cut this expense down though - I belong to a no-frills gym. So at least I don’t pay more than a fiver a week.

I’m also in recovery from a pretty fiendish Amazon habit. The second-hand books I buy usually cost less than 5p, but the delivery costs mount up.

Given the uncertain financial climate, that’s definitely unjustifiable spending. I’m aiming to spend more time at my local library, which is fun for my son as well.

[Related link: How companies make you spend more online]

But there are also some expenses that I won’t ever cut back on – and here they are:

Healthy food: It sometimes seems like junk food is cheaper than healthy options. After all, you can pick up an entire frozen pizza for a pound.

But with careful planning, you can keep the cost of fruit and veg right down, which is much better for your family’s health. Check out the Change 4 Life campaign’s supermeals recipe finder for cheap, healthy meal ideas.

Insurance: When things are tight, it can be tempting to cut back on insurance to save money. For example, you might decide to increase the excess on your car insurance to reduce the premium.

But it doesn’t take much imagination to see that this is a recipe for disaster. In the event that you need to claim on a policy, you’ll be far worse off if you don’t have all the protection that you need.

A pension: Even when times are tough, you need to think about your long-term financial security and that means saving into a pension if at all possible.

You’ll get tax relief on any contributions and if your employer agrees to match them then it’s effectively free money.

Heating: Most people can save money by turning their thermostat down just a notch and putting on an extra jumper. But if you’re an older person, or you’re ill, or there’s a young baby in the house then don’t let it get too cold.

If you’re over 60, disabled or on a low income then there is help available, check out the Directgov site to see what’s available.

Dentist: Even with an NHS dentist, trips to get your teeth checked out can feel like an expense you can put off. But a check-up costs just £17.40, while a filling pushes the cost up to £48. If you let things get really bad and need complex work like crowns, dentures and bridges then there’s a fixed cost of £209.

In short, paying for regular check-ups can help you avoid more expensive work.

What cuts would you refuse to make? Are Britons wrong to prioritise holidays and pets? Where could you cut back? Share your thoughts with other readers in the comments below.