Save an extra £3000 over the year
Being a little more frugal this year could increase your savings by as much as £3000.
The average household debt in the UK is £58,040 and £8,939 including and excluding mortgages, respectively. This suggests that the average person may not be able to significantly save, however it may be easier than one thinks. One of the most effective ways to increase your savings is to create a budget.
Budgeting is an essential element to financial planning. It is a basic tool to understand how much money you have, where it goes and how best to allocate your funds. On the surface, creating a budget can appear to be tedious financial exercise, however it is vital in order to track spending, tackle debt and even uncover some hidden cash flow problems.
An extra few thousand pounds per year can go towards decreasing your debt or making an extra contribution to your ISA.
Savings account
Research by Abbey Savings indicates that 28 per cent of British parents with young children have no savings or investments and four out of ten Britons have no savings at all.
It is time to take stock of your spending habits. After paying your monthly bills, can you afford to decrease your ‘personal allowance’ in order to contribute to a savings account? Monthly savings of £50 would result in annual saving of £650 excluding interest.
Credit cards
Although using credit cards is a convenient way to pay for goods and services, the average credit card debt in the UK is approximately £5,900 per card holder. One of the best ways to clear your debt is to consolidate your debts and obtain a personal loan. This will significantly help decrease high interest payments associated with credit cards.
If you are in the financial position to pay your credit card bill in full every month, switch to a cash back credit card to pay for monthly expenses (e.g. utility bills, car insurance etc.). Compare different cards to see who offers the best rewards.
Spare change
Collect spare change in a piggy bank. Saving loose change on a daily basis will add up before you realise - £1 a day will add up £365 over the course of a year!
Quit smoking
If you are a pack-a-day smoker you could save approximately £1860 over a year by quitting. By doing so, you may qualify for significantly lower life insurance rates.
Cut down on alcohol spending
Cut down on pub nights - invite friends over to your flat/house once in a while instead of racking up large pub tabs. Alcohol is much cheaper when purchased from an off-license. Saving £30 a month in pub tabs would increase your savings by £360 per year.
Eating out
Eating out can be an expensive habit. Limiting your restaurant experience to twice a month could save you over a thousand pounds per year. Seek discounts through voucher offers online (e.g. two-for-one meals – see myvouchercodes.co.uk).
**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within this article/our website, but to conduct their own research and seek independent advice about the financial products they purchase.**
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