Money saving tips
Keeping it simple
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Increasing the amount of money you have available to you at the end of the month can be achieved in two ways:
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Increase your income
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Decrease your expenses
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Increase your income
Increasing your income can appear the more difficult as there are fewer obvious options, but before we delve into the numerous options for money saving you could consider a few methods to increase your income. Our expertise lies in reducing expenses therefore we have not listed all the possible income generating opportunities here, but these should serve as a useful introduction in how to improve your income potential.
Rent a room in your home: demand for housing has never been greater, therefore why not consider renting a room in your home to a lodger? The government currently allows you to do this tax-free up to a threshold each financial year (April to March). The UK government’s portal has further detail on this option.
Sell unwanted or old items: chances are you will have items around your home that you no longer want, need or use. Why not consider selling these to someone who wants them and would pay for them? This can be an effective way of raising money both quickly and regularly, and best of all you can do it in your time, at your own speed. eBay and Shpock are well known and widely used platforms to list and purchase goods.
Offer your skills and services: as modest as we all are (!), we are all talented individuals in our own ways and it is likely others could benefit from our knowledge. Why not offer your skills and services to those that need it? Perhaps you are a teacher or subject matter expert, therefore well equipped to tutor others privately, or an IT specialist therefore able to educate others on technology. Whatever it may be, consider advertising your skills and offering to teach others.
Check if you're entitled to benefits: don’t be ashamed to claim. Many people fall into financial hardship and when it comes to this, you may well be able to call on the government to help. Some people feel nervous or embarrassed about claiming benefits but it’s important to stress that there is no need to feel like this. This support exists to help people in challenging times and can be the difference between a temporary financial struggle and a prolonged period of suffering. Which benefits and the amount will depend on a multiple factors, including your income, your partner's income, savings, and whether you have children. Whilst the benefits may not cover your living expenses and mortgage entirely, even a little can help you.
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Decrease your expenses
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Saving money can cover a large number of areas therefore it is best to organise your efforts by areas of spending. For example, in trying to avoid repossession you could perhaps first review the spending related to your property. For many their mortgage is their largest single expense, so this is a logical place to start. Following on from that there are numerous areas of other essential spend and non-essential spend. Tackle these in groups to ensure you get complete coverage of your expenses but also focus on the largest possible savings first.
Mortgage related spending: to stop home repossession you will need to repay your mortgage sooner or later. However, there are several ways in which you can reduce your future mortgage costs. Missing payments and falling into arrears is the first indication that you may be heading towards eviction. The most direct way to prevent receiving a repossession order from court is to mutually agree a way forward with your lender and stop repossession. Key options to consider:
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Extending your mortgage term, with the aim of reducing your monthly repayments to a manageable sum
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Taking a mortgage payment holiday, allowing you to either stop or reduce monthly repayments for a period
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Re-mortgaging to a lower interest rate with your lender, resulting in lower monthly repayments
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Capitalise your arrears or pay a contribution towards them, to show that you are trying to improve your situation
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Consider changing to a different lender to secure better mortgage rates and terms
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Other spending: Sometimes simple measures such as cutting back on routine expenses can make a big difference in your finances and even help you save enough to repay your mortgage. The areas are wide ranging therefore are best organised into sub areas as per the below. There are specific queries related to each type of spending, which you can explore interactively through the tiles.
Credit cards and loans
Can you make any lump sum payments to clear down debt and are you paying the cheapest possible interest rates?
Banking, savings and investments
Are you saving as much as you possibly can and are you receiving the highest rates of interest and returns?
Council
tax
Have you checked if your home is in the correct council tax band or whether you are entitled to discounts, such as single person or student?
Travel and holidays
Are you taking more vacations than you can afford and are you paying the lowest possible prices when you travel?
Utilities
and bills
Are you paying too much for your gas, electric and water bills – have you performed a price comparison recently?
Groceries
Could you make savings by shopping at an alternative supermarket, even if you continue purchasing the same items?
Social and entertainment
Are you maximising the levels of discounts available to you? There are plenty of 2-for-1 and other offers, don’t pay full price!
Retail and clothing
Are you purchasing items that you don’t need and are you paying retail prices as opposed to sale or discounted prices for your items? Don’t pay full price!
Phone, mobile and internet
Do you need to be on the plan that are you on, do you fully utilise your minutes and data allowances, and have you shopped around?
Rail, cars
and fuel
Are you using making use of discounts, such as railcards for trains and fuel cards for petrol and diesel?
Insurance
Simple – are you paying too much for your insurance, is your level of cover too high or are you paying for insurance you don’t actually need?
Pensions
Are you optimising your tax efficiency by paying into a pension and can you salary sacrifice to move you into a lower tax rate banding?
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Next steps and useful guidance
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Use our free budget planner to populate your actual costs versus the lowest potential costs for each area of spending, and see how much you could save each month. You can then focus on implementing these savings by working your way down the list.
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Similarly our useful links section sets out a number of free money saving websites and tools that can help you, such as an OFGEM-approved utility price comparison tool, to see if you can get a better deal on your gas, electric or fuel costs. It is also important to recognise that there is help at hand if you feel you are losing control of your finances. Free and impartial legal advice is given by trained advisers at organisations such as Shelter or the Citizens Advice Bureau. These charity bodies are experienced in helping customers to find the information and support they need. Other examples of organisations helping with this are PayPlan, StepChange and the Debt Advice Foundation. These bodies can offer impartial over-the-phone advice and often have useful guides and resources freely available online for you to read and use. We have included links to all of these bodies in our useful links section.
We wish you the best of luck on your money saving journey! :)
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