Once you have drawn up a budget and taken steps to cut your essential monthly bills, it’s time to see what you can do about those less important expenses.
Whether it’s weekly drinks with work mates or that top-of-the-line satellite TV package, we all spend a fair portion of our monthly income on things that, while important to us, are nonetheless avoidable.
Unfortunately, if you’re still struggling to make ends meet, then these “luxury” purchases are the only place to target for further cutbacks.
A lot of room for improvement
I’m sure that many of you were surprised, upon finishing your budget, to learn just how much money disappears on frivolous purchases each month.
We live in a world of instant gratification, with so many businesses competing for our attention/income. As a result, most of us could probably do with spending a little less in this department.
That said, it’s essential you don’t go too far in the other direction and set yourself unreasonably miserly targets.
As well as making you miserable, it will drastically increase your chances of failure. And when you break that mental barrier once, it makes it far easier to simply ignore your goals and overspend the next time round as well.
Spend wisely, and you won’t need to be miserly
The good news is that saving money on non-essentials doesn’t always mean going without. In fact, there are a host of areas where you can get exactly the same thing for less money.
Here are just a few examples:
Broadband: The price of broadband is coming down all the time, so no matter how good a deal you got a year ago, you’re almost certain to find a significantly cheaper one today.
When shopping around for a new deal, keep in mind that the maximum speed you can achieve will depend on how close you live to the telephone exchange. There’s no point in signing up for an 8Mb line if your neighbourhood can only provide a maximum of 1Mb. Your provider should inform you of the maximum speed you can achieve when you sign up, and if not it’s important you contact them to check.
TV package: Yes it’s expensive, but for some people it’s more than worth it. Just make sure you shop around to find the cheapest possible deal. Also, if you happen to have broadband as well, consider signing up for a package deal that combines your TV, Internet and phone with one provider, as these can be notably cheaper
Mobile phone: A 2007 survey found that Britons waste a massive £1.8 billion worth of unused texts and minutes every year, with the average user leaving 100 minutes and 73 texts unused every month. To make sure you aren’t throwing money down the drain, consider the following key factors before signing up to a contract:
- When do you make the majority of you calls (peak or off-peak times)?
- How many minutes do you use in total each month?
- How many texts do you use on average every month?
- How much do you ideally want to pay each month?
- Is there a particular handset you want?
Restaurants/movies: The Internet is a great place to find vouchers for your favourite eateries or local cinema. With a minimum of fuss you can save as much as 50% on your entertainment costs.
Travel: If you’re planning on visiting your family or simply want to get a way for a while, be sure to book your tickets as far in advance as possible. Your diligence will be rewarded with far cheaper fares.
Moderation is the key
All of the above will help drastically reduce your outlays without impacting on your lifestyle, so doing them is really a ‘no-brainer’. However, there are also a number of more difficult changes to make if you are serious about saving money.
For many of us, meeting friends for drinks is a favourite pastime, but it’s an obscenely expensive one. If you were to set yourself a realistic target, say, going out with friends one less time a month, you will be able to cut your costs without feeling like you’ve become a hermit.
And there are so many other areas where you can make similar reductions. Takeaways are another prime example: Quick and easy though they may be, the amount we are charged for these processed foods is obscene. Say no to that cheeseburger every other time and you’ll be able to save whilst still satisfying your junk food cravings.
Saving is habit-forming
They may not all be ideal, but these changes can be the difference between financial ruin and keeping your head afloat.
The good news is that cutting back gets easier the more you do it. While at first it may seem a real pain to say no to an impulse buy, once you start seeing the rewards for your frugality reflected in your budget you will be more than happy to keep your money in your pocket.
