- 3 Aug 2020
- Reading time
- 3 minutes
For many people, saving money for the future or a rainy day is something they know they should do, yet they continue to put it off for one reason or another. This means that unexpected bills or a loss of earnings can result in disaster.
Instead of waiting to slash spending when you have too much month at the end of your money, you can make your life easier by making smaller changes to your spending habits in the good times to give you a cushion for the bad times.
This means that a broken washing machine or a car repair bill won’t leave you in a cold sweat and your winter heating bill won’t keep you up all night.
Saving up to pay for a big purchase like a car, holiday or piece of expensive electrical equipment also means that you’ll save money since interest on loans and credit cards can be as high as 40+%.
Therefore, if you manage to save up £10,000 to buy a new car instead of buying it on credit, you could typically save anywhere between £2,000 and £10,000 over five years.
So if you want to start building a rainy day fund or a nest egg, try some of these tricks.
Do I Need This?
The biggest saving you can make is 100%. You can achieve this by simply not spending the money in the first place. While you can’t go without paying for important things like food and utilities, you can stop buying unnecessary clothes and electronic goods.
If you find yourself in a shop or browsing for goods online, before you commit to buying, ask yourself “do I need this?” If you’re unsure of the answer, wait a day or two before you make your final decision. If it was just an impulse purchase, you will have changed your mind by then and saved yourself 100%.
Vouchers, Coupons, and Discounts
For products and services that you do decide to pay for, you can still find ways to save money by taking advantage of discounts and promotions offered by retailers and vouchers and coupons issued by manufacturers.
You can find these for just about everything, including vouchers for discounts on food and other groceries, online casino bonuses to help your betting go further, and many restaurant coupons to cut the cost of eating out.
There are even mobile apps you can download to get more vouchers. Good examples of these include Shopmium and CheckoutSmart. With these two apps, you buy the product in the store and then take a photo of the receipt to be reimbursed instead of getting the discount at the checkout.
When vouchers and discounts aren’t available, you may be able to get cashback. There are several sites in the UK, including TopCashback and Quidco that will pay you a rebate when you shop with certain retailers online. This can be anywhere between 1% up to 50+%, depending on the brand, the products, how much you’re spending, and whether you’re a new customer.
You can also use a cashback credit card to save even more. In the UK, cashback credit cards are a little hard to come by nowadays as we live through a period of record-low interest rates and because legislation has limited the amount that card companies can charge retailers. In the past, higher fees would fund the rebates earned by customers, but the retailer would have to pass on these costs with higher prices.
Amazon offers one of the few remaining cashback cards for consumers but spending outside of its website generates a rebate of less than 1%. American Express offers cashback of up to 5%, but this is typically limited to a few months or comes with an annual card fee.
Slash Your Bills
According to MoneySuperMarket, around 25% of Brits have never changed their energy provider. Its research found that around three-quarters of these people would save around £150 per year if they did switch.
In England and Wales, switching your gas and electricity suppliers is easy, although there are differences elsewhere in the UK. When you switch, your supply is not cut off, you don’t need to wait for an engineer, and the process usually takes just a few minutes online. Comparison services can help you find the cheapest supplier.
Similarly, you can use these comparison services to find the cheapest car, travel, home, and pet insurance. You can even use them for more niche products like gap insurance when buying a new car.