The winter months are behind us and chances are that your thoughts are turning to sunnier climes and your summer holidays.
Sadly, all too many of us will return home this summer with a financial hangover to go with our aching heads and queasy guts. And, facing bulging credit card statements is not the most relaxing way to spend the rest of the year.
So why not avoid the credit-induced anxiety this year? Cut back on expenses so that you can pay for your holiday without going into debt. It’s not as difficult as you may think – most households waste hundreds of pounds every month on non-essentials. Follow these tips and you’ll be well on your way to that credit-free holiday.
Switch energy supplier
It’s essential you’re on the cheapest possible energy deal - otherwise you are throwing money away. You can actually save up to £200 by switching (according to watchdog Energywatch). Sadly, more than half of UK households have never switched, and are almost certainly paying far more than necessary.
Even if you have switched in the last year or two, you should definitely check to see if a cheaper deal is available – providers are constantly reshuffling their prices in order to attract new customers with discount deals while bulking up profits at the expense of their longstanding customers.
Three sure-fire ways to cut the fat from your energy bills are: Choose a supplier’s online tariff, sign up to their dual fuel offering and pay by direct debit. Finally, reduce the amount of energy you use every month by insulating your home. Read more about this here.
Max out those online discounts
Not only is it far easier to buy things online – no pushy salespeople or soul-crushing queues –it’s far cheaper too. Whether it’s car insurance, golf clubs or restaurant reservations, you can save anywhere up to 40% simply by surfing your way to the till.
Another great advantage of online shopping is the ability to find competitive deals much more easily. Use our switching service to make sure all your households bills – broadband, gas, electricity, phone and digital TV – are the cheapest around.
Attract good interest, shed bad interest
If you’ve got money sitting in a savings account then you need to make sure it’s working as hard as possible for you. Don’t simply accept a saving account from your bank, as you’re almost certain to find a better rate elsewhere.
Your first savings vehicle should always be a tax-free cash ISA. Only once you have used your £3,600 annual allowance should you look for a traditional high interest savings account. For high rate taxpayers, avoid paying 40% tax on savings by putting it into your partner’s name if they are a basic rate tax payer or pay no tax at all.
Of course, there’s no point in trying to save money if you’ve got debt piling up elsewhere, as this normally costs you more in interest payments than you earn on your savings. Shift any existing debt to an interest free balance transfer credit card and pay it off as soon as possible.
Food for thought
A loaf of bread cost just 9p in 1993, but today it’ll cost you more than £1. Food is eating a large chunk of our disposable income these days, so it’s an obvious target for household savings. We’re not talking about supermodel-esque fasting, just watching what you spend your money on.
Takeaways are great for when you just can’t be bothered to cook anything, but they are expensive. Reduce the amount of times you eat out or get takeaways and you’ll be better off for it (both financially and nutritionally).
Consider buying more no-name brand goods at the supermarket. The quality is essentially same, but the price most definitely isn’t. If you’re an impulse buyer you can save yourself a small fortune by purchasing all your groceries online. Once you have filled out an order, you can save it to your computer and re-order it with a single click, thus avoiding the temptation of ‘perusing the aisles’ every month. The money you save on transportation should help cover the delivery fee (usually around £5).
Finally, change your eating habits at work. Bringing in lunch from home and skipping that daily Starbucks coffee will result in a significant saving over time.
Contract killer
You’re probably signed up to more contracts than you realise, so there’s a good chance you can do without one or two of them without infringing on your lifestyle in any way.
Some of the obvious targets are gym memberships and TV deals. These costs hundreds of pounds a year, so if you’re not getting regular use out of them, terminate them.
Also look at whether you can downgrade some of your other contracts – do you even come close to using all your mobile phone minutes each month? If not, switch to a cheaper package.
Finally, whenever any contract – be it car insurance, phone or broadband – comes to an end, never accept a new deal from your provider as you’re almost certain to find a far cheaper deal elsewhere.
How much could you save?
Below is a rough guide of how much you can save just by trimming some of the fat from your bloated budget.
| Do this… | Monthly saving |
| Cancel your gym contract | £50 |
| Downgrade your broadband and mobile phone package | £10 |
| Cancel your Sky subscription | £20 |
| Switch to no name brand goods | £45 |
| Switch energy provider | £17 |
| Bring lunch to work, skip Starbucks | £70 |
| Eat two fewer takeaways per month | £40 |
| Total Monthly Saving: | £252 |
