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Reduce your Outgoings: You Could Save over £1,000 a Year
Get your finances organised...
  ...and save yourself more of this!
Recently someone asked us at Moneymagpie exactly which monthly costs it was ok to forgo, and which you really couldn’t do without. They were considering whether it was worth risking cancelling some of their insurance in an attempt to save some extra cash. Making sacrifices isn’t always easy, particularly when you’ve got used to a certain way of life, but to weather the current financial storm, it’s realistic to expect to make some. Let’s just clear one thing up though, thinking of hundreds of ways you could better spend that £15 a month that currently pays your home insurance premium is not what we had in mind. There are some things you definitely can’t sacrifice! That’s not to say however that you can’t get a better deal on all these kinds of essential costs. We’re going to show you how to switch deals, and save money without having to risk giving up any neccessary insurance costs.
Assess what you need and what you don’tHave a good think about this. Look at the value for money you are getting from the direct debits and regular payments you make. What are they for? Do you need these things? Most of the time the answer will be yes - especially if you are paying off debts of any kind. But look at your insurances and other payments - what other things are you regularly spending money on? Write it all down and you may be able to spot some items you don't necessarily need. Say you have no dependents for instance, then consider whether you really need life insurance or not. Perhaps think about putting money into a high interest savings account as an alternative to paying for private medical insurance. Kaupthing Edge currently has a one year savings account that offers you 6.55% AER. Of course this kind of thing depends very much on your individual situation, so get some expert advice about personal finance free of charge from your bank or building society.
Find something cheaperOnce you know exactly what you need to keep, you can consider swapping to a cheaper provider of the same service. Find the cheapest rates on sites like Comparethemarket and Moneysupermarket. Have a look at our best buys section where you can compare prices for all kinds of insurance, utility bills, mortgages, loans and credit cards and get the best possible deal. Don't forget to check out our article on how to make big savings on your energy bills. We also have lots of tips and advice on getting the best home insurance, car insurance, private medical insurance, and life insurance.
Insure your belongings at the lowest rateWhen you make purchases such as a new mobile or a new computer make sure you check if it's covered in your home contents insurance first. If not, you can always take advantage of offers when you buy it - mobile phones are often offered with a few months free insurance for instance. Be careful though, as companies rely on the fact that some people forget to cancel it and end up paying the premium for the rest of the contract. So make a note in your diary and remember to cancel it! You can also get six months free gadget insurance with any Barclaycard Platinum Visa at the moment. The Platinum visa also offers you 0% on balance transfers until October 2009 and 0% interest on purchases for the first three months. Check it out here. Of course, after those initial few months your gadget is obviously older and less valuable. Once you no longer have it insured free of charge, you should seriously consider if it's worth paying the premium to insure it. Have a look at our articles on computer insurance and mobile phone insurance for more details.
Give up some luxuries - switch to saveIf you really need to save some serious money, you'll have to be brutal about cutting your costs. You can't stop insuring your home for instance, but do you really need two cars? You could save loads by just having one or downsizing to a smaller and cheaper second vehicle. Have a look at our article on alternatives to owning a car and see if we can change your mind. Do you really need all those hundreds of channels you get with your Sky subscription? You could switch to freeview instead. You can get a set top box for about £20 - have a look at the bargain boxes available at Argos. That's the only payment you need to make and you get 30 or more free-to-air channels, which compares favourably to a Sky subscription; even with the cheapest option (£16 a month) you're forking out £192 a year! You might love your Sky movies subscription, but at £34 a month, it's costing you £408 a year! Why not swap it for LoveFilm? You can subscribe to a cheap plan that gets you two films a month for just £3.99, so £47.88 a year. What about ditching that costly mobile contract and opting for pay-as-you-go instead? That way you'll be able to keep track of exactly what you spend. If you use your phone all the time and really don't think pay-as-you-go is a feasible option, make sure you're getting the best contract for your money. Have a look at our article on getting the right mobile phone deal for you. Downgrading to cheaper brand items at the supermarket is really quite painless. You can start by trying out a few of the budget items to see which you like. This way you can save up to 30% on your weekly shopping bill. Just follow the simple rules in our sneaky supermarket tricks article. Don't forget those little day-to-day costs as everything really adds up. The average Brit spends £5 every working day on lunch, that works out at over £1,000 a year! Try taking your lunch to work more often, and bringing a flask of coffee with you instead of buying some. Check out our advice on keeping a spending diary.
Save money and the environmentBeing environmentally savvy will not only help you feel good about yourself, it'll help your wallet too! Don't waste food! We throw away a third of all the food that is bought in the UK according to Lovefoodhatewaste. Check out their website for loads of information and ideas on how to use those leftovers. Cut your water bills and save water. Here's just a few ways to save litres and litres...
Now for the most important bit! According to savewatersavemoney, if you manage to cut your water usage by 20 litres a day, you'll save yourself £25 a year on your bills! You can also cut your energy bills by following these handy hints:
Save money by switching not ditchingSo hopefully we've proved you can save yourself a fair bit of money without having to ditch too much of what you love, and of course keeping that all-important insurance. We took a look at how much the average family could save by cutting their costs:
Switch sky for freeview - £172 a year Switch bought lunch for homemade lunch - £1,000 a year Saving water - upwards of £25 a year Saving energy - upwards of £37 a year Total Saving = £1,234
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Joanna Robinson
Moneymagpie Moneypedia
19.08.2008
