With Christmas seeming a distant memory and everyone either going back to work or school, January’s a good time to start thinking about the year ahead. Did you set yourself any New Year resolutions? One of these may be to look at improving your finances and getting your expenses organised. You might be looking to save for a wedding, holiday abroad or generally just putting some money aside. If this is the case, you’re probably thinking of ways to cut down your monthly spending, or savvy ways to live cheaper. Keep reading for ways to help you spring clean your finances.
What did you spend last year?
A good place to start when planning your finances is to identify how much you spent last year and what you actually spent it on. Follow these simply steps to break down your finances.
1. Access your internet banking/statement
One of the easiest ways to calculate your monthly out goings is to look at your internet banking. Most banks allow you to see your monthly statements online, that way you can make sure your spending is accurate. If you don’t have internet banking, you may receive monthly statements in the post or you may be able to request these from your bank.
2. Calculate your direct debits/standing orders
Ask yourself this… do you know how much you spend each month on direct debits/standing orders? If not, it’s best to write down each payment and add up the figures. If you’ve not looked at this in detail before it may be a good way of seeing where you can save. Here’s some examples to help you:
Do you know when your phone contract is up for renewal? If not, it’s definitely worth checking so you can shop around for better deals. Many phone providers now offer incentives to switch and you may find a cheaper contract for similar benefits to what you’re getting now. It might only save you a few pounds per month but over a 24 month contract, you will see the difference. Have a think about what it is you need from your contract. Do you need the phone insurance? – Your phone may already be covered under your home insurance so it may be worth checking with your insurance provider. Do you need that extra GB of data? Have a think about how often you actually use your data, if you have Wi-Fi at home and at work, you may not need as much data as you think.
Is there a subscription to the lottery, magazine or movie app that you don’t necessarily need or use? If not, it may be worth cancelling them to save money, it may only be £10 a month but if you add that up over the course of the year that’s £120 that you would be saving. If you do decide to cancel a direct debit, why not put the amount away in a savings account instead?
We all love the luxury of having access to hundreds of channels, films and TV series, but have you ever assessed how much TV you watch? Nowadays TV bundles are a thing of the norm, but are they necessary? The big providers often offer extensions to standard packages and at the time, it can seem quite tempting. Shopping around and sacrificing some of your channels may save you a small fortune.
If you’re a homeowner gas and electric is something you’ll always need to pay for so it makes sense to find the best deals you can. Energy switching is on the rise as thousands of customers are actively looking to switch supplier. Have a read of our blog on energy switching to see where you could save.
3. Weekly spending
Looking at your average weekly spend is another good way of cost saving. An easy way to do this is jot down everything you spend in a week. From petrol to lunch, it’s important that everything is taken into account including the small things. See below for a template example that you could use to work out your weekly spend.
Once you’ve filled this out for a week, you can see how much you’re spending on each individual item and can total the amount for the week. Use this as a guide to cutting down your spending. If you can see you’re spending too much on petrol, try and reduce the number of trips you are doing or if you are buying lunch on your lunch break, make a pack up and take it in. Starting the year with a new budget could give you some direction and a plan to stick to. Naturally, this will become a routine and you’ll start to notice your savings will increase.
Think about your year ahead
Now you know what’s coming in and going out of your bank account, you can start to plan for the year ahead as you know what you can afford to save. You can start to think about what it is you’re saving for and work out a plan to be able to afford life pleasures. Here are some more tips on how you can save.
Be supermarket strict
If you do the weekly shop, you’ll know how easy it is to add unnecessary bits to your trolley, especially when you’re hungry. Try and plan your meals for the week ahead and buy in bulk. This way you’ll have enough ingredients for your lunch and dinner. Start off by writing down what meals you are going to have on each day and work out from the list what food you need to buy. It’s very easy to pick something up and think ‘I might have that later on in the week’ so try and stick to your plan. It’s also worth looking for discounts and deals when shopping. Do you need to buy branded items over supermarket own? Is there really that much difference. Sacrificing your brands may save you quite a bit at the till so give it a try for a week and compare it to your normal bill.
If you have a regular supermarket, have a look to see if they offer any loyalty schemes. I know it seems like hassle having to sign up but it is definitely worth it if you’re doing your weekly shop there. You may receive coupons for money off your next shop or discounted rates on petrol and diesel. These are things you’re going to always need so you may as well get as much for your money as you can.
Collect your change
Are you one to leave change lying about or in coat pockets and forget about it? If so you should try the 1p saving challenge. Simply save 1p on the first day of the year, 2p on the second day and keep going all the way until the end of the year. In total you would save £667.95 a year!! Now when you get to nearer the end of the year, you’ll be putting in a lot more on a daily basis, however if you get into the routine, it will be a lot easier. Just think what you could do with that saving.
Has it been a while since you last changed bank or even just look around at rewards and interest rates. Some banks offer incentives to switch such as cashback, gift cards and monthly rewards. Do you know what your account offers you in terms of interest? You may find that there are better interest rates available with other banks so it’s worth checking.
Shop around nowadays most things can be found on price comparison websites. From energy bills to mobile phone contracts and it’s a great way of saving money. Simply analyse your bills and go online and see if there’s cheaper alternatives. Once your phone is up for renewal, could you get a sim only contract where you pay less a month than what you would do on a contact? Is there opportunity to decrease your electricity bill by switching supplier? It’s important to have an understanding of what you can get for your money especially when looking at your finances for the new year. To find out more about energy switching, read our blog here.
Take advantage of cashback
Cashback is a reward for making a purchase and there are now plenty of offers to consumers. Using cashback for things that you already pay for could be a clever little way to generate further saving. Some websites offer cashback on a wide range of different purchases from travel, electricals and even clothes. Next time you’re planning to purchase something, take a look at what cashback deals are available. Simply search ‘cash back on (your item)’ and see what comes up.
Sell your clutter
Now Christmas is done, you may find that your house is looking slightly more cluttered. New gifts are received which means room is made to store them. Reduce your clutter by selling unwanted things online. Have a rummage through your rooms, garages and lofts to see if there’s items that you no longer need.