Everyone’s feeling the pinch at the moment – but did you know by how much?

Accountancy firm PriceWaterhouseCoopers has calculated that the average UK household will suffer a hefty £1,050 squeeze on their finances this year, due to a combination of higher prices, new taxes and benefit cuts.

The Centre for Economics and Business Research (CEBR) has even predicted that this year will see household disposable income fall to levels not seen since the 1920s.

The good news? There are some simple steps you can take that will help cushion the blow on your finances. In fact, by following our advice below, you may even end up better off than before.

We’ll show you how to make a £1,000 and how to save a £1,000.

But before you do either, if you’re feeling the pinch the first thing we suggest you do is…

• Make a budget
• How to save £1,000
• How to make £1,000

Make a budget

If you’re already struggling to make ends meet before the cuts have even kicked in (and many people are), then draw up a budget. That way, you’ll be aware of every pound coming in and every one going out – and can therefore ensure that your income is always higher than your outgoings.

It needn’t be hard work. Use our free budget planner to quickly and easily find out how much you spend, on what, and when.

When you see all your spending in black and white, you’ll be surprised at how many unnecessary costs you’ll notice – which you could cut without making much difference to your quality of life. (To take one example: if you pick up a coffee from Costa or Starbucks on the way to work each day, you are spending over £500 a year just to satisfy your morning caffeine craving!)

How to save £1,000

There are simple changes you can make to stop cash needlessly draining away from your pocket. Set aside an afternoon to do the following and you could save over £1,050 for the whole year.

Cut your bills

So many people don’t bother to check whether they’re getting ripped off on their bills, yet it’s so easy to compare and switch with comparison tools.

If you do nothing else, make sure you check you’re not paying through the nose in the three areas below:

1. Energy bills

Energy bills have seen some whopping rises recently – but if you play the market, you can make some hefty savings.

Use our comparison tool below and you could save up to £468 on your energy bills – a saving that’s not to sniffed at, for the sake of a few minutes work.

Potential saving: up to £468

2. Car insurance

Make sure you’re not getting taken for a ride with your motor insurance. Again, use our quick and easy comparison tool which we run with Confused.com. Independent research by Consumer Intelligence has shown that a whopping 97% of customers could save money using it (with 50% finding they could save £200 or more).

Potential saving:£200+

3. Life insurance

This is another area where many people are paying over the odds. Buying your policy through a reputable comparison site could easily save you thousands of pounds.

If you’re not sure whether or not you need life insurance, read our quick guide.

Moneymagpie uses Money-minder for our life insurance comparison service. We recommend it because:

• It compares policies from across the market in an easy to understand manner
• Their life insurance calculator is really useful and most importantly, free! It lets you work out exactly how much cover you need just by answering some simple questions
• They manage to consistently offer cheaper deals than big industry players such as MoneySupermarket.com and Tesco. It’s possible to save anywhere between £800 (a non-smoker switching from Moneysupermarket.com) to over £6,000 (a smoker switching from Direct Line) over the full term cost of the policy.

See how much you could save with Money-minder.

Potential saving: £32-125 a year (if non smoker) £49-£240 (if smoker)

Make sure you’re not missing out on benefits or tax credits

There may be all sorts of benefit cuts coming into action right now – but you may well be entitled to benefit support that you aren’t claiming.

There are more than £8 billion worth of tax credits and benefits in the UK that are going unclaimed. HM Revenue and Customs also estimates that nine out of ten families with children are eligible for some form of tax credit, but many do not bother to claim them.

Use the EntitledTo benefits checker to find out whether you’re eligible for any benefits. It only takes two ticks to use.

Potential saving: anything from £100s to £1,000s

Track down your unclaimed money

We’re not talking about the change that’s fallen down the back of your sofa. There’s over 15 billion pounds lying unclaimed in Britain’s banks and building societies – that’s an average of £312 for every adult in Britain.

Many of us have savings accounts, insurance policies, shares or pension schemes that we’ve lost track of or forgotten about.

Luckily, you can track down your lost accounts for free with Mylostaccount to see if you have any old accounts lying dormant.

Potential saving: the average claim is £90, but some lost accounts have contained thousands

Reduce your food bills

The average family spends £220 a month on food. If you are spending way above this (if you’re a sucker for takeaways, for example) use our budget planner see exactly where your money is going and help cut down your grocery bill.

Make sure you always get the best deal when you go shopping. My Supermarket is a free supermarket price comparison tool – allowing you to easily work out where your weekly shop will be cheapest.

It can save up to 35% off the average shopping bill, which amounts to nearly £1,000 over the course of one year.

Potential saving: around £1,000 a year

How to make a £1,000

Get £100 by switching your bank account

You can get an easy £100 (and earn a very decent 5% interest) with a Preferred Current Account from Santander. When you switch using their dedicated online service you’ll get £100 cashback, while the account itself gives you 5% interest on balances up to £2,500 and an interest free overdraft for 12 months. Get the details here.

Potential profit: £100 plus interest on savings

Rent out your spare space

If you’ve got space to spare, you could make money from it by renting it out for thousands of (tax-free) pounds a year. You could even rent out your whole house for a time. If you’re not comfortable with other people taking over your property, you could rent out a room, cellar, or attic as storage space. Another possibility is renting out your driveway (for up to £500 a month!) if you live in an area where parking places are scarce. See our article on renting for further details.

Potential profit: up to £4,250/year (tax free) for renting out a room through placing an advert on a service like Easyroommate

Potential profit: up to £500/month for renting out your driveway through Parklet or Parkatmyhouse (depending on your location)

Make money online

You can get paid to read e-mails with Inbox Dollars. As the name suggests, the company calculates your online earnings in dollars, but they’ll pay you between $1 – $10 for every e-mail you read that’s sent by them. Just click the link in the paid e-mail (which will take you to the advertiser’s website) and they’ll credit your account with the money.

Another way to get a bit of cash is to fill in online surveys. Sign up to a website like MySurvey and get paid to answer questionnaires. Normal pay rates for completing a survey can be anything from 50p to £10 – typically, the longer the survey, the higher the reward. Most surveys are fairly short and don’t take much time to complete. Other survey sites worth checking out include: MySurveyand Lightspeed Panel.

Potential profit: Depends on how much time you spend on them, but you can potentially earn £100s a year

Use your spare time

There are plenty of ways to make cash in you spare time. For example:

• Become a freelance proofreader. Earn around £10 an hour (up to £30 an hour with the relevant qualifications). Find out about freelance proofreading opportunities here.
• Market research job opportunities are often flexible and can pay around £50-£70 a day. There is no selling involved – it’s typically centred on interviewing people. Usually, no prior experience is necessary. Find out more about market research jobs here.
• Make £25 an hour as a Virtual Assistant. This is where you offer administrative support (such as typing, letter writing, and data input) to businesses working from home.
• A useful website called Sliversoftime.com can match people with just a few hours to spare here and there with local work that’s part-time. You don’t have to make a regular commitment – just enter the days and times you’re free to work on the site calendar, and these spare hours will automatically be sent to local agencies. Businesses such as call centres, retail outlets and offices who have regular part-time vacancies will then get in touch who can offer you the work hours that suit you.
• It’s possible to make £490 a month by working just 15 hours a week doing bar work. See our full article on it here.

For a whole host of other ways to make cash, click here.

Potential profit: £1,000s per year part-time, while some people make a full-time living as a proofreader or Virtual Assistant.

Sell your junk

Why not get rid of unwanted household goods (from clothes to electronics) by selling them on eBay?

An alternative option is to use the site eBid. This is very similar to eBay, except that you don’t have to pay to list your items (called an ‘insertion fee’ that ranges from 10p to £1.90 for most items). Although (as with eBay) they do take a ‘final value fee’, of 3%.

If you’re the type of person who has piles of old, unread books taking up precious space in their house, we have just the solution – sell books online at Green Metropolis for £3 a piece. It’s easy to do: log on, enter the book’s ISBN number (check the back of the book) and describe its condition.

There’s no charge for listing books, so it really is the ideal way to make money and recycle your old books.

Don’t forget that plenty of companies will pay a pretty penny for your old or broken mobile phone. Some of the better models can go for a couple of hundred pounds, so whatever you do don’t throw your mobile away before checking out its potential value. Moneymagpie has its very own Mobile Phone Recycling Tool – just click on the make and model of your phone and see which company will give you the best price for it.

Potential profit: up to £200 (more if selling expensive goods on eBay or eBid)

Use cashback

If you’re shopping online, it’s definitely worth checking out cashback sites. They give you money back on products you buy through them (retailers pay them to promote their products, they pass on some of this money as savings to you).
Websites such as Cashback Shopper have plenty of good deals, and offer you a £5 bonus just for signing up. See our article for more details.

Potential saving: depends on how often you use them, but is perfectly possible to rack up £100s of savings a year through them – especially if you use them for your big purchases (such as electronics or household goods)

Useful links

Save a £1,000

• Cut your bills
• Get the benefits you’re entitled to
• Track down unclaimed money
• Reduce your food costs

Make a £1,000

• Get £100 to switch
• Rent your space
• Make money online
• Use your spare time
• Sell your junk
• Take advantage of cashback