Blitz through these tips and save money!
From lost income to unexpected extra mouths to feed, the current coronavirus crisis is having a financial impact on most us in all kinds of ways. A third of households are struggling on reduced income as a result of the lockdown measures, according to new research by GoCompare. We could all do with a little help right now, so here are some of tried and tested money-saving tips to help you claw back the pounds.
1. Switch Energy Supplier
Ofgem calculates that the average household can save £300 a year by switching to a better energy and gas deal. If you haven’t done this in the last 18 months, now might be a good time to grab your latest utility statements and check out comparison sites such as uswitch or moneysupermarket for example.
2. Cut your interest
If you’ve got credit card debt, don’t pay interest on it! Transfer it onto a 0% balance credit card to avoid paying interest for a fixed time (up to 30 months). Some cards come with a small balance transfer fees, so make sure you do the maths. Set up a direct debit to avoid missing minimum payments and being stung with high charges. If you still have debt after the 0% period ends, move to another deal. Do not use this card for purchases.
3. Check your credit rating
We can’t over-emphasise the importance of having a good credit rating. From credit cards to mortgages, it’s important to make sure you are as attractive as possible to lenders in order to net the best lending rates from them. Think of it as your financial CV. All lenders use financial data provided by at least one of the UK’s three main credit reference agencies – Equifax, Experian and TransUnion (previously Callcredit) so find out what your credit files say (it’s free). Are they up to date and accurate?
4. Go incognito!
Using an incognito browser when you shop online can help you save money by automatically deleting your browser history when you close a tab. This means companies can’t track what you’re looking at and put prices up (yes, it happens!).
5. Don’t splurge on payday
Nationwide’s Payday Saveday survey revealed 1 in 5 people spend over half their spare monthly wages within 48 hours of getting paid! Always prioritise your most important outgoings and something for the savings pot before you start spending. That way you’ll know how much disposable income you really have.
6. Get Saving Savvy
If you haven’t already, maximise your £20,000 tax free ISA allowance. You can either put money into a cash or investment ISA. Admittedly, rates for cash ISAs aren’t great at the moment, but you’ll get more the longer you are prepared to leave the money untouched. Check out www.gov.uk/individual-savings-accounts for more information. Check for the best cash ISA rates at Moneyfacts.
7. Review your work benefits
If you haven’t had time in the past to check out the benefits your employer may offer, now might be a good time. From healthcare plans and childcare support to local discounts, know what’s on offer, sign up and (when life’s back to some sort of normality) you’ll reap the maximum reward.
8. Take back your pension
Whether you’ve moved jobs and lost track of a pension or have a sneaking suspicion that you have an old savings account with £100 in, use MyLostAccount or the Pension Tracing Service to track down old bank accounts or pension.
9. Weather the storm
If the current crisis has taught us anything, it’s the importance of a rainy day fund. If yours has taken a battering recently (or you never really had one), start saving – anything is better than nothing. The rule of thumb is to have three months’ income saved for emergencies, ideally six if you have a mortgage.
10. Learn a skill
Millions of us are learning new skills online while we’re stuck at home and saving ourselves money by doing the painting and decorating and other household jobs ourselves. You can find helpful videos on YouTube and www.skillshare.com. Any jobs you’re doing yourself, where in the past you’d have paid out, is money in the bank account.
11. Clear out the loft
Nearly six in 10 people admit to having over 50 unused items stored away – up to the estimated value of £483, according to eBay. Turn unwanted items into cash by selling them online.
12. Choose supermarket brands
Swapping branded products for own brand alternatives is an easy way to slash the price of your shopping bill – from cornflakes and pasta, to oven chips and washing up liquid. If you’re worried about the taste being compromised, ‘blind’ test them out on the family first! If they don’t notice the difference, you’re onto a winner!
13. Waste less food
Shockingly, almost three quarters of what we throw away in the home is edible, according to recycling charity WRAP. Make a conscious effort to use everything you buy and you’ll save a fortune. If you’re worried about food safety, remember: ‘use by’ date is the cut-off after which it is not considered safe to eat the food. However, eating food past a ‘best before’ date won’t cause any health issues. For recipe inspiration, check out our storecupboard recipes in the food channel.
14. Renegotiate insurance policies
MoneySupermarket research shows more than a quarter of drivers and homeowners/renters are voiding their car or home insurance by not complying with the terms and conditions carefully. Don’t pay for a policy and then get caught out this way!
And if you’re not using your car during lockdown, ask your insurer for a refund! Admiral is giving a £25 refund to all its car insurance customers and other providers are under pressure to follow suit.
15. Develop a financial plan
While it’s tricky to pre-plan your annual expenditure, especially in these uncertain times, why not split the year in half? Break down your income and set financial goals and milestones in a diary or chart – it will be really useful to give you an idea of household expenditure during and post lockdown.
16. Go Paperless Billing
If you ditch paper bills and become an online customer, you’re almost always more likely to get access to a range of better deals and cheaper plans. Not to mention you can monitor and manage your account online or through a smartphone app.
17. Track your spending
The more conscious you are of what you are spending the less likely you are to overspend. Use free budgeting apps like Yolt or Money Dashboard to monitor all your accounts in one place on a handy dashboard. Digital banks like Monzo, Starling and Bó are also great at helping you manage your spending with a number of budgeting tools within their apps. It could be useful to check your current spending pattern as it may differ from your usual one.
18. Diarize a regular review
Put a regular note in your diary to review your finances, from bills to your spending. This will help you see where you can save money. If money management isn’t your strong point, ask a financially savvy friend to help. There are also lots of useful budget calculators at the Money Advice Service website.
19. Withstand pressure
You know what they say about idle hands…don’t let the enforced confinement send your online shopping bill soaring. Be mindful in what you buy. It’s all too easy to shop through boredom! If you find you have an online basket full at the end of the evening, leave it overnight and look again in the cold light of day!
20. Set but don’t forget your Direct debits
Never miss a payment by setting up direct debits to cover your bills. Paying your household bills, like electricity, gas, mortgage or rent and council tax should be your priority. If you are worried about affording the essentials at the moment, contact debt charity Stepchange for free advice and support.