The "Repel" and "Undead" spells tend to be hit-or-miss, but will almost always eliminate enemy parties if you cast them while the enemy animation is on its second frame. (i.e. when the ghoul opens its mouth, or the goblin lowers its stick)
If the entire party has perished, Lord British will resurrect the party leader without any cost to the player. This can be exploited by first creating three disposable characters, placing whichever character you desire to resurrect in the leader position, then killing the entire party. It's a rather tedious process, but it can save some gold in the long-run.