t’s all very well being told that we should be saving more. We should be saving for a rainy day, a house, a family, education costs, retirement… The list is endless.
So many of us KNOW we should be saving more but sometimes that’s easier said than done and our outgoings can make the idea of saving seems a bit overwhelming – we feel squeezed.
You’re not alone.
To help, we’ve come up with some top tips from our Financial Advice team to save money without having to compromise, you don’t need to cancel Christmas or make drastic cuts. You can enjoy the here and now and still save for a rainy day.
These simple money saving tips could help you get on back track with your savings goals.
REMEMBER: Even small increases in your savings add up over time.
1) Check your recurring payments
You might have small recurring charges that you’ve forgotten you even had. Check direct debits and monthly subscriptions and see if you still need them all, make sure you’re not paying for something unnecessarily and cancel any that you no longer need or use.
If you use Paypal, don’t forget to check your pre-approved payments (to do this log into your accounts > settings> Under “Manage upcoming payments’ select pre-approved payments to see a list of all pre-approved payments on there, you can cancel from here or contact the company directly. This five-minute job helped me cancel subscriptions I’d forgotten I even had. I saved £30 a month in the time it took to boil the kettle.
Here’s the important bit – once you’ve made these savings set up a monthly direct debit for the same amount to pay into your savings account.
2) Sign up to a cashback site
Earlier this year my partner and I got married in Costa Rica, we signed up to TopCashback and earned cash back on everything we bought – air travel, hotels, insurance, suitcases, clothing etc- collectively we got about £800 back and we did price comparisons to make sure we weren’t overpaying to get the cash back. We shopped the cheapest deals and earned cash back for it.
There are a couple of different options for cash back sites, Quidco and Topcashback are the big two. Topcashback is the one we have tried and tested at 2020 Financial.
3) Review your pension
If you don’t review your pensions you could be stuck paying high charges or have a poorly performing pension, which could cost you thousands of pounds when you come to retire.
When you review your pension you should be looking at both fees and performance. Some older pensions don’t always offer value for money. If you are paying high fees then they could be eating away at any profit you are making, check the small print for hidden fees that you may not be aware of. Compound this over time and it could be extremely costly.
N.B. High fees don’t necessarily equal a bad deal, sometimes you get what you pay for and the performance may warrant the investment. However, if your pension is performing badly AND you’re paying high fees then you could be losing out in a big way.
If this is all foreign to you, enlist the help of a pension specialist. They’ll be able to show you how your pension is performing against other pension products in the marketplace and compare fees. In most cases, it should be possible to move your pension and although there will be costs associated with doing this, sometimes they are far outweighed by the benefits of moving your money to a better performing pension product.
We offer a free pension review, speak to one of our friendly Pension Specialists today for full details
N.B. If you do decide to move your pension, the costs associated with this can normally be deducted from your pension pot so you don’t have to worry about finding the extra cash now.
4) Review your insurances
Most of us have a number of insurance policies – Home, contents insurances, car, tech and gadget cover, travel, boiler cover, pet insurance, dental, health, life insurance. You should be reviewing these every year to make sure that you have adequate cover –
- When was the last time you reviewed them?
- Are you over/under insured?
- Are you paying too much?
It’s worth checking even if your renewal isn’t due yet. I saved over £80 a year and got £40 cashback, even after I had to pay a £50 admin charge to cancel my car insurance halfway through the year.
Shop around because when it comes to insurance (especially car insurance) loyalty doesn’t always pay. Car Insurers admit themselves that you should always shop for a new policy, even if you stay with the same provider, 9/10 times you will be offered a lower premium.
Call your existing insurers for their best deal and then go online and shop it around. Once you’ve found the best deal for you, have a look on your cashback site and see if you can earn cash back on the deal as well.
Important note on insurance
The name of the game is to save money without leaving yourself open to loss. Don’t cancel insurance policies you need just to save a few pounds. It’s important to remember that not having adequate cover can be a costly mistake; when my 12-week old puppy had a major accident, his initial vet bills and rehabilitation cost almost £8000, luckily he was insured and I had read the small print, lesser policies cap the cost of claims at £3000, so I would have been left massively out of pocket.
It’s a balance between cover and policy cost. If you’re reviewing complex policies like life insurance and critical illness cover, it’s worth speaking to an expert.
We know that some insurances can be complicated to understand. If you need help choosing the best Life Insurance or Critical Illness cover to suit you why not contact us
5) Pay off debts first
If you have credit cards and debts, and you also have savings, 9 times out of 10 you will be better off by paying off the debts first, especially if you have money sat in a bank account earning little to no interest.
Don’t allow the false sense of security, that having cash in the bank can bring, keep you in debt longer than you need to be. If you’re accruing interest charges it’ll take longer to pay off the debt.
Switch Credit Cards to get the best deal and transfer your credit balance to a 0% deal to save on interest payments. There are plenty of comparison sites that you can check to see the best deals on offer.
MAKE A PLAN
If you can’t pay off debt and credit cards straight away, make sure you’re on the best interest rate available, try switching to an 0% interest credit card (google: best 0% interest balance transfers) and make a plan to pay the debts off as quickly as possible.
Don’t stick to the minimum payments – it could take you years to pay it off and cost you more in interest payments. Wherever possible pay off as much as you can afford to over and above the minimum payment and try and pay it off as quickly as possible.
Once you’ve paid off the debt, redirect those monthly payments into a savings account, since you’re already used to that money going out.
6) Reduce your energy use
Install an energy smart meter and you can start to see when and where your energy use spikes and also where you can save: –
- Turn off gadgets that sit on standby
- Unplug chargers when not in use
- Turn off lights in rooms that aren’t in use (my Dad will LOVE me for writing this)
- Turn the thermostat down just a couple of degrees and put on a jumper and socks rather than ramping up the heating – Did you know sleeping in a cooler room also helps with weight loss?
- Only run full wash loads/dishwasher loads
Every little helps as they say.
7) Review your mortgage
Our mortgage can be one of the biggest outgoings in our budget and even marginal changes can make a huge difference over the lifetime of the borrowing.
Mortgage rates are at an all-time low and if you’re on an older deal, you could save big here. Plus, there are also some great fixed rate deals for those who like a bit more certainty.
You’ll have to pay fees on a new mortgage but if you’re paying a higher interest rate now, you may still be better off moving to a new mortgage. Shop around, there are some great brokers out there who can help you find the best deal, don’t be scared to talk to more than one to get an idea of what you could be paying.
8) Automate your buying choices
Automating your weekly shop online, not only saves you the time and effort of going to the shop but it will also stop you from bumping up the cost of your food shop with unnecessary add-ons and ‘deals’ you don’t need.
Be a savvy shopper, bulk buy durable items that you know you will use for big discounts, like kitchen roll, shampoo, washing powder – places like costco and makro have industrial-sized items that can offer big savings. Amazon’s Subscribe and Save offers typically offer 5% savings. Amazon Prime members get 20% off nappy subscriptions at Amazon Family. Just don’t hoard unnecessarily or get lured into buying things you don’t need, only buy it if you are definitely going to use it and if the saving warrants it.
9) Shop your bank account
If you’re looking to take out a mortgage with your bank then sometimes being a loyal customer can be advantageous, but there are good reasons to reassess your banking from time to time, especially now some are threatening negative interest rates.
There are still some good bank accounts out there, some offer cash back, others have cash joining bonuses preferential interest rates or free insurance cover. Shop around and see if you could be better off. Offers at the moment including £220 of M&S vouchers to switch to an M&S current account, £150 cash to switch to Co-op and £100 to switch to First Direct. Source :Moneysupermarket
Make sure you check out the small print. We like Money Saving Expert’s free guide to switching, they offer some good tips to look at these deals objectively.
10) Cut your food expenses
In our blog post Are you eating your life savings, we talked about how the British are spending up to a quarter of their income on food. If you want to boost your savings you might want to try cutting the food budget first.
- Switch to supermarket own brand or take the Aldi challenge on your weekly shop.
- Packed lunches was the easy win, in a move that could save almost £800 a year.
There are some easy wins to be had here. To read our full list of simple swaps, head over to the original blog post.
Don’t forget to Automate your savings
It’s easy to fritter away small savings and find something else to spend the money on – Don’t. Squirrel that money away quickly, once you’ve found a saving, automate a weekly direct debit for that amount to pay directly into your savings/ISA/pension. You’ll be amazed to see the difference in just a few weeks and over the years accumulated savings can grow into large savings pots.