Normally, if you think about saving money, it’s because you either want to spend it on something or you have very little or no money and feel insecure and restless about it…
Whatever your situation is, know this, with some focus, strong will and cleverness, you can come out of it and make a better future for yourself, so let’s start with the basics!
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Saving on the basics
The basic exercise involves knowing how much money you have coming in all your earnings and how much money you have going out all your expenses. If you have any credit cards you are paying, note down how much you pay in interest every month too.
Whatever your situation, you should note down your objectives. Do you want to save for retirement, to put down a deposit for a mortgage, to buy a car? Do you need to pay off your credit cards or do you want to feel more in control? Think about what you want to achieve and note that on top of a blank page.
Important: If you are paying interest on any credit you have, that being shop credit accounts, shop credit cards or standard credit cards, you need to pay those first, and fast! Go to moneysavingexpert, check out best deals on cards with 12 months or more interest-free credit and transfer your credit across to the new card or use it to clear your shop account. You still need to pay monthly but your money is decreasing your debt instead of paying interest to the bank.
Higher expenses than earnings?
Step 1 – Look at each expense and group them so you end up with different groups like food, utilities, transports, going out, etc. Make sure the sum of your groups covers all the expenses.
Step 2 – Look at your expense groups and make some decisions. What can you cut down on? We all think we need everything but actually, we can live with a lot less…
Now, another bit of juicy information… if you use the link below during January and subscribe to an energy plan, you will get £100.00 credit on your account on month 12. In addition to that, if when you join, you book a free smart meter installation, you will receive another £50.00 credit in your account. That is £150.00 savings right out of your energy bill. You can have a look here and play around with the different price plans so you can really see what savings each plan can give you. For example, even if you don’t need a SIM card, start with the plan that includes one and select the £10.00 SIM card available, that will give you a much lower price for your Gas and Electricity and your savings will be greater. It works a bit like a meal deal, you don’t want the drink but you take it to get the deal!
What do you know this far? You know how much you have coming in, how much you have going out and what your main expense groups are… if you have credit, you have taken steps to pay less so that is already saving money!
Now, lets set a saving challenge across each group, see what is achievable. I have some examples that I have used before so you can have an idea:
Utilities – Save £25.00 a month
Contact your providers and negotiate better deals (this is valid for gas, electricity, phone, broadband, TV and mobile phones. If you decide to change your provider, make sure they are not charging you early exit fees, so ask about that first! See this post where I talk about saving on utilities and food shopping. With a few adjustments on the main utilities gas, electricity and broadband you can achieve half the monthly challenge, now see below for the other half.
Do you really need that TV contract?
Spend a week watching YouTube and news Apps instead, see how you feel. I cancelled my contract with my TV provider after this 1-week trial and am so happy I did it. I now have this Fire TV Stick on our kitchen TV and this 4K Fire TV Stick one in our main TV with an Amazon Prime subscription, that has all the content we need as a family plus free Amazon deliveries and music and you can set really good parental controls! Best of all, I cancelled my TV license, saving £12.87 each month or over £150.00 for the full year, this more than pays for a full year Prime subscription plus the fire stick that will last you many years.
Important: If you decide to cancel your TV license, you must stop watching live programs or live streams, you can only watch recorded! So make a few adjustments… We read the news in the morning and listen to more podcasts instead of watching the live news! You can cancel it here. If you log into your account first, the system will fill most details for you. You just need to add that you now have an Amazon stick instead, no other proof is needed.
Food – Save £25.00 a month
Food shopping is one of my favourite ways of saving money and no, you don’t have to compromise on quality! Did I tell you I worked in several packhouses when I first moved to England? Well, the same packhouse packed produce for the top 5 supermarket chains in the UK with the same raw material! Different packaging, different labels and yes, some brands are more specific on the product spec than others but do you really mind if you Apple is slightly wonky? Read more about changes you can make to save on food shopping.
Transports – Save £25.00 a month
Do you commute to work? Before I decided to start working from home, I was paying a staggering six grand for my train ticket! I was lucky, I could walk to the train station but many of us have to drive there and pay for parking too. Below are things I did before deciding to work from home, see if you can try at least one, the more you do, the higher the savings.
Tips: Discuss flexible working with your boss, can you buy off-peak tickets instead? Can you work from home one or two days a week? Does your company offer season ticket loans? You can read more about season tickets here. Can you park in a residential area near the train station instead of paying for parking or discuss a loan as above with your employer? Make sure it is safe! You may need to adjust your insurance, so you are covered for any eventualities but, might save you money.
Going out – Save £25.00 a month
This was not a big issue for me as I actually like cooking and prefer to entertain at home rather than going out, but there are always things you can streamline! Start with small things like getting your own reusable travel mug, I have this one that I love! I used to get a Costa coffee every day at £3.00 each so investing in a mug is still a saving!
Other things we adjusted were the movie nights, we go to the cinema less often and have a family movie night at home instead. We still enjoy popcorn and nachos, we just make them at home and enjoy them as a family and in our pyjamas. I actually prefer that and so do the kids.
Higher earnings than expenses?
Earnings higher than your expenses? You can still make adjustments to save money and allocate savings to paying debt. Use your savings to pay any store accounts or credit cards that are charging interest. If that is not the case, think about how best to invest your money securely, I have a post coming out about that next week!
These are some of the steps worked for me, I hope they are informative and help you on your way to reaching the financial goals you have set to achieve this year!
I always like to hear your opinion, drop me a comment with your thoughts or any strategies you have used to save money. How did they work for you? And if you enjoyed reading this article please share it!