Making your money go further is increasingly important as inflation is on the increase and typically incomes are not keeping up. This article looks at some simple techniques to stretch your money without compromising your lifestyle.
Top 20 "leaks"
A survey undertaken by the Money Advice Service showed the top 20 ways many of us feel we are wasting our money – they call it the top 20 ‘leaks’. How many apply to you?
- Takeaway meals.
- Paying for lunch or snacks while at work.
- Satellite TV subscriptions for unwatched channels.
- Paying too much for utility bills by not reviewing.
- Buying expensive takeaway coffee.
- Buying too many ready meals.
- Spending too much money at the pub or club.
- Cigarettes and tobacco.
- Mobile phone contract .
- Paying avoidable bank or overdraft charges.
- Paying avoidable credit card charges.
- Paying too much for home insurance.
- Paying too much for car insurance.
- Netflix or similar subscriptions.
- Paying fees at cash-tills to withdraw cash.
- Paying avoidable credit card annual fees.
- Unwanted magazine subscriptions.
- Gym membership which is hardly used.
- Subscriptions for apps that are hardly used.
- Amazon Prime membership.
Take a look at your bank account; it helps to understand how you currently spend your money before you try to make savings.
For each of the ‘leaks’, there is help available to help you reduce the waste.
Review
We all know we should regularly review our household services, loans and insurances. The total cost of these can add up to account for the biggest proportion of our expenditure, so savings here can really mount up.
Interestingly, mortgage payments do not appear in the "Top 20" but they can be one of the biggest offenders. Mortgage payments, loans, energy bills and house and car insurance costs can all benefit from a review using the available comparison sites, which can help save you hundreds of pounds a year.
Finding the right comparison site can be a task in itself, so this link takes you to a useful article from the MoneyHelper describing how to find the best comparison site and how to use them.
Useful Hint
Set an alert on your mobile phone a month before the renewal of your insurances (3 months before your mortgage rate expires or annually for utilities and other insurances) reminding you to set aside some time to review your rates.
Plan
Late payment charges can easily be avoided if you set up a regular payment from your bank. For example, you can set up a direct debit to pay off the minimum, a set amount or the full amount on your credit card each month. This can ensure you are never late and never miss a payment. You can pay more at any time during the month, but you know you will not impact your credit record.
Planning your meals so you can avoid costly takeaways and lunchtime trips to the cafe is a great way to save money – but it can also be tastier and healthier. Cooking a little more the night before and taking in the leftovers the following day can make a big difference. Assuming you spend £3.50 a day on a sandwich and crisps, that is £17.50 a week, £70 a month or £840 a year! That will make quite a dent in your credit card balance!
Useful Hint
If you are always busy you may be in danger of missing deadlines for bills and incurring late payment charges.
Contact your bank and set up a regular payment to avoid these charges and the negative effect on your credit score.
Do you need it? Can you afford it? Do you want it?
Whether you are considering a new purchase or reviewing those subscriptions you have leaving your bank account each month, ask yourself these three questions and you’ll make better decisions. Cancelling subscriptions you don’t use is a bit like cleaning out the cupboard under the stairs – you’ll feel much better afterwards.
Vouchers & Deals
Very few of us have the time to devote to extreme couponing as seen on TV, but there are some useful apps and websites that can make those little treats we all deserve a little more affordable. If you use O2 as your mobile phone provider, you automatically qualify for priority deals – from a free coffee at Caffe Nero on a Tuesday, advance notice of tickets and events or discounts to some popular retailers.
Professional services
Do you need help from a lawyer, accountant or financial adviser? Some of these services may be provided through your Flex programme but you could use the links below.