Does payday always seem a little too far away? Financial writer Kara Gammell shares a few simple tricks to help make your money go that bit further.
There’s no denying it: while careful financial planning is important, sometimes it’s the little, everyday changes that can really improve your bank balance. Hot on the heels of our list of seven things you can live without, here are five more financial life-hacks that can help the health of your bottom line.
1. Get your budget under control
We all know we must keep our spending, bills, and savings on an even keel. For many of us, it can be a challenge. However, using the 50/20/30 rule with your expenses can help. With this system, you spilt everything into three main categories.
The first, ‘Essential Expenses’, should account for 50% of your take-home pay, covering housing, transportation, utilities and food.
Next come ‘Financial Priorities’, which should take up about 20% of your take-home pay. Here you account for goals such as pension contributions, savings and debt payments.
You should make these contributions and payments after you pay your Essential Expenses, but before you do any other spending.
The remaining 30% of your take-home pay is yours to spend on ‘Lifestyle Choices’ - the voluntary and often most fun ways you spend your cash. This includes entertainment, gym memberships, hobbies and shopping.
2. Review your household bills
How often have you thought about changing your energy, phone or insurance provider? Chances are, it’s something that you might have thought about but never got round to, and this lack of action could be costing you dearly.
According to consumer organization Which ?, the average household could save around £300 by switching energy provider. Figures from Which? also show that while four in ten people think they could get a better mobile phone deal from another network, around half have never switched, losing out on a potential saving of £159 a year . What’s more, Which? research has also found that shopping around for car insurance could save an average of £130 .
A good rule of thumb is to review all of these outgoings each year, setting aside time to go through each direct debit and checking if you could cut costs by switching to a cheaper provider. The easiest way to do this is to use a comparison site such a Moneysupermarket.com, uSwitch.com or Confused.com. For your mobile phone bills, check out Billmonitor.com, which is approved by the telecoms regulator Ofcom.
3. Slash your supermarket spend
You probably don’t realise it, but your loyalty to the supermarket giants could be costing you hundreds of pounds a year. Simply switching to a discount retailer could substantially cut your grocery bills without scrimping on quality.
Found on most high streets, these shops offer good quality food (especially produce and British-sourced meat) at competitive prices.
Eight weeks ago, I made the switch from a supermarket giant to a discount retailer and I reckon I’ve shaved 30% off my food spend – an impressive £100 a month. But I’m not the only one to be converted: figures show that around £1 in every £10 spent in supermarkets now goes through the tills at these bargain supermarkets.
4. Cut your cable costs and go online
With the darker nights drawing in, many of us commit to serious television consumption. Admittedly, a digital television subscription such as Sky or Virgin may be cheaper than a big night out, but you could cut your cable costs further by simply switching to a streaming service such as Netflix or Amazon Prime, or Sky’s Now TV.
You could cut costs further by sharing subscriptions with friends and family. Research by comparison website Broadband Genie has found that a quarter of users access streaming services with shared logins, rising to around 50% for Netflix. Most services allow multiple streams for families or households – check the provider’s terms and conditions carefully.
5. Shrink your data and save a bundle
Smartphones mean we can surf the net with just a few flicks of the finger. But this instant access to the web comes at a price and the ‘currency’ is data. Exceed your monthly allowance, and you could be facing a hefty bill. In fact, figures from comparison website uSwitch.com show that almost a quarter of us are paying more for extra data, spending an average of £90 annually .
But you could reduce the amount of data you use, without reducing the amount you use the phone itself – Chrome and Opera web browsers (available for Android and iOS) both include compression features that can cut data use for internet surfing by up to 40%.
Of course, this only covers internet browsing, not data-hungry apps such as You Tube, Facebook and Twitter. To cut phone-wide data use, consider installing a data saver app such as Onavo or Opera Max. Data saver apps also usually track exactly how much data each app eats up, so you can see whether it’s your Twitter habit or cat video obsession that’s costing you.
Got any money saving tips to share? Let us know below or head to the Forum
This article has been commissioned by retiresavvy and any opinions voiced are the author's own.