Right, so. You’ve created a budget and discovered you’ve got some disposable income. Now what? Leaving your leftover cash in your current account, while easy, doesn’t gain you anything. It also means you can dip in and spend whenever you want, which isn’t ideal if you’re a shopaholic. Saving is a good habit to have – stashing cash will future-proof your finances and mean you’re well prepared for any surprise bills.
Let’s take a look at some different ways you can cut back, put money away, and gain control over your money.
Tips on saving money
1. Research savings accounts
Your current account won’t give you much interest – any money you’re trying to save will be better off in a high interest account. Overtime, the more you save, the more money you’ll be earning interest on. It’s essentially free money. Money Saving Expert has a great roundup of the best saving accounts, so find one which works for you. Make your money work for you.
2. Lower your borrowing costs
If you’ve got outstanding credit card debt, transfer your outstanding balances from high interest cards to 0% balance transfer cards. When looking to switch, double check for any transfer fees. Again, Money Saving Expert has a comprehensive list of the best balance transfer cards around at the moment. Do your research properly before switching.
If you can’t switch, Reddit’s r/ukpersonalfinance has a wiki which advises paying off debts, focussing on the highest interest rates first, and switching to lower rates as soon as you can. The rest of the wiki is filled with sound financial advice, so check out the rest of the steps while you’re there.
3. Pay insurances annually
Paying insurances annually is often cheaper than paying monthly. Of course, to do this you’ll need to have the total cost of your premium in your bank. That may not be an option this year, but next year, once you’ve put all these tips into action and have saved up, you’ll be able to pay annually. If you opt for paying monthly, the insurance provider loans you the premium cost, known as a fixed sum credit, and you pay the loan off monthly. The increased cost is from the loan’s interest. Paying annually is free from interest, hence the lower cost.
4. Cancel or pause subscriptions
Have a look at which subscriptions you’re paying for. Look through your bank account or credit card statements for any regular payments – you might have subscriptions you’d completely forgotten about. Make a list of the subscriptions you have, whether it’s for streaming, TV, music, gym, recipe/food boxes, and so on. If you don’t use it, cut it. If there’s overlap, then cut the one you don’t use as much. You don’t have to straight up cancel, you can always pause or “Take a Break” for a few months. If you don’t notice it’s gone, then cancel it.
5. Review and switch broadband and phone contracts
It’s well known that broadband and mobile networks give their best prices to new customers. Mid-contract price rises and steep renewal costs mean that the price you signed up for won’t be the price you renew for. When the time comes to renew, give your current provider a ring and haggle — you can reduce the cost of the tariff you’re on, or if your circumstances have changed, you can move to a new tariff so you’re getting the best value for your money, or you can improve your allowances (speed, calls, data) without spending extra. If you’re not happy with your current provider, then switching is the best move.
6. Save on grocery shopping
Switch branded food to own-brand, buy in bulk, or switch to frozen. Supermarkets sometimes have a ‘wonky’ veg option – a bent carrot still tastes like a carrot – which can save you money on buying fresh. Our How to shop on a budget article covers this in more detail. Take advantage of supermarket loyalty cards, as you can earn rewards, get access to lower prices, or earn cashback. Nectar, Clubcard, More Card, Bonus Card… the list goes on.
7. Don’t waste food
You’ve spent money on food with the intention of eating it. Not using it and binning it is not just a waste of food, it’s a waste of money. Plan your meals and only buy the food you need. As we say in all of our recipes, check your cupboards before you hit the shops so you don’t end up buying things to already have.
8. Set up a saving plan
Saying to put your disposable income in a savings account is easy. Having the discipline to stick with it is the hard part. If you’ve worked out your monthly budget and uncovered disposable income, you could siphon a portion of it off to go and live in a high interest savings account.
For example, if you’ve got a spare £150 a month, you could put £50 into a savings account. That’s £600 a year + interest. Set this up as a standing order on the 1st of the month – this will remove your opportunity to spend it. And if you find at the end of the month you have money leftover, transfer that in as well. If you’ve chosen an easy access account, you’ll still be able to use the money (it isn’t locked away) if anything crops up, but having your excess cash earning interest will be better for you in the long run.
9. Turn off switches you’re not using
“It’s like the bloody Blackpool illuminations in here!” – a polite way of saying, turn some lights off. Do you need the big light, the side lights, and the lamps on at the same time? No. Turning things off at the switch when you’re not using them might remind you of something your dad used to keep on about, but he was right. Leaving things on when you don’t need them costs money, and with the high prices of electricity at the moment, every saving helps.
10. The ‘leave it for a week’ approach
Before you buy that thing you saw, make a note of it, leave it in your basket – come back in a week instead. If you still want it in a week’s time, then buy it. Chances are, after a week, you’d have forgotten about it, seen something else, or decided that you didn’t actually want/need it after all. Do this for all of your purchases and you might find you save a lot of money through buying a lot less.
