Saving money isn’t always easy, so we’ve compiled this list of our top five money saving tips to help give you a fighting chance.
1. Do your research
You’ll be surprised at just how much money you can save by switching .
It always pays to shop around!
2. Save with a goal in mind
One of the greatest secrets to saving is saving with a goal in mind.
Last year, two thirds of those who saved with a goal in mind reached their target.
Equally having an extra incentive or ‘commitment device’ means that savers set a higher target for themselves. Those who used an extra incentive last year aimed to save £4,900 compared to those who did not have an incentive, who only aimed to save £2,500.
But what incentives can you give yourself? Well it can be as simple as telling your friends or family what you aim to save. Vocalising your target and letting others know what you’re aiming for will make you psychologically more determined to meet that target.
Write down your goal plus the cost of it. Then each week you can add up how much you’ve saved so far and how much closer you are to your goal. It could be:
- A secondhand car – £4,000
- A deposit on a house – £15,000
- A trip to Florida – £1,500
- Christmas – £450
or whatever are your personal goals. Think about what they are and start planning – it’s actually quite fun (no really…it can be!)
3. Get a cheap credit report
If you’re looking to get a loan then the first thing you should do is get a credit report so you can see what lenders are seeing. By doing so you can correct any mistakes or anything you think isn’t an accurate reflection of your overall financial situation and thereby clear up your credit report.
To get a report you should head to Top10CreditReport.com who provide a free credit report service comparison tool so you can see which services rank the highest according to their score rating criteria.
4. Pay less tax
While most of us have to pay tax in some form, there’s no need to pay any more than you need to. Britons waste billions of pounds every year paying too much tax – but there are completely legal ways to pay less tax.
- Pay into an ISA – SAs are still one of the most effective ways to cut down on paying tax on your savings and investment income. The allowance is now £20,000 for ISA-wrapped investments.
- Spread your investment – We all have our own income tax and Capital Gains tax thresholds – but if you are married or in a civil partnership you effectively have twice the threshold of a single person. So make the most of it! If you have savings and investments, then put the majority of them in the name of whichever one of you is the lower taxpayer, as this will reduce your overall tax bill as a couple.
- Pay into a pension – Yes, pensions are a great way of reducing the tax you pay to the government. They’re particularly helpful for people paying a higher rate tax. Any money you put into a pension has the tax you would have paid added in to the pot instead. It means your investment grows from the moment you put your money in.
5. Go green
Cut the cost of your energy bills and you’ll have more cash to spend on what you want, especially during these chilly winter months when we all could do with some cheering up.
Most people disregard going green because of the associated up-front costs. But if you work out the savings you’ll make in the long run, they are worth the investment. There are also plenty of small, low-cost changes you can make that will have a big impact on your bills.
Find out more by reading our article – green savings and grants galore.