Despite the government saying austerity is over, many are still feeling the pinch financially. While we’d all probably like to earn a bit more money to help ease the financial squeeze, for most, this isn’t an option. Reducing your monthly outgoings is, however, meaning you could end up having more to spend on the things you enjoy.
Create A Budget
Before you cut costs, you need to work out how much you spend each month and what you spend your money on. This will help you identify where you can make savings and work out how much you can save. The best way to do this is to create a budget, one that lists both your income and all your outgoings, from regular payments (think mortgages, car loans, childcare etc.) to one-off purchases (the coffee on the way to work or weekend trip to the cinema).
You can create a budget using a simple spreadsheet or if you aren’t comfortable or confident doing that, use an online budget tool (www.thisismoney.co.uk has one that’s free and simple to use on their website).
Ways To Save Money
There are plenty of ways to save money. Here we look at seven that offer quick wins when it comes to decreasing your monthly outgoings.
1. Cancel direct debits or regular payments
Take a look at what goes out each month that you might not need and cancel these accounts, saving money instantly. This might be a membership to a gym you don’t attend or subscribing to two TV streaming services when you only need one.
Most regular payments will be through direct debits but don’t forget to check your credit card statements too.
2. Shop online
It’s really easy to overspend when you shop for food because supermarkets entice you with special offers. You can reduce the chances of you overspending by writing a list of what you really need and making an online order, so you aren’t tempted to buy what you don’t actually want.
Before you order, check the delivery fee or it might wipe out any savings; look for the lowest fee or make sure your order makes you eligible for free delivery.
3. Switch off appliances
As the nights draw in and the evenings get colder, you’re likely to see our energy bills go up. You can help keep them down by switching off appliances you aren’t using. This means turning them off at the socket, not leaving them on standby: Energy UK estimates we waste £30 a year on appliances left on standby and £13 a year leaving lights on in unoccupied rooms.
Use energy saving appliances whenever you can; energy saving bulbs or LED lighting can save you £35 a year.
4. Look for the best deal
While it’s much easier to let insurance policies renew automatically and to stick with your energy supplier or broadband company once your initial deal has expired, it’s not the cheapest option. Most companies offer the best deals to new customers, relying on the fact that existing customers are too lazy, too busy, or just too confused to make a change. By shopping around, you could find a better deal and save yourself money.
If you’re happy with your provider and don’t want to change, it’s worth shopping around for better deals and asking your current supplier to match them.
5. Change your commute
Depending on where you work, and how you get there, you can cut costs by taking out a bus or train pass or splitting your train travel into stages. If you drive, arrange car sharing, reducing the cost of petrol for you and your colleagues.
If you live close enough to your office to cycle to work, see if your company offers the cycle to work scheme, which can save you up to 39% off the cost of a bike.
6. Take a packed lunch
Thinking about what to eat for lunch when you’re rushing around trying to get ready for work might seem like too much trouble. However, taking a few minutes to make yourself a sandwich could save you up to £2,500 a year (based on a survey by Visa Contactless which shows workers spend an average of £10.59 a day on food and snacks).
If you don’t have time to make yourself something every morning, think about what you can make in advance and portion it up, so you can quickly grab it as you head out the door.
7. Swap to 0% interest credit cards
Paying interest on credit cards is a bit like giving your money away. In 2016, a household’s average credit card debt was just over £2,000. If they made the minimum payment until it was paid off, it would take 25 years before the debt was cleared. Transferring balances to 0% interest credit cards could save you lots of money in the long-run.
As you pay off your credit card, your monthly minimum payment will reduce. Stick to making your original monthly minimum so you can pay off your credit card quicker.
Keep Saving Money
When it comes to reducing your monthly outgoings, think of it as an ongoing activity. Check your finances against your budget every three months. This will help you make sure you’re saving the amount of money you thought you would be and identify any other ways to decrease your outgoings.