Brace yourself guys – this article is an absolute monster! But, by being here, you’re telling me that you are looking for ways to save money on household bills, and we are going to give them to you! 111 ways to save money on household bills to be precise. Each with a detailed explanation of what to do, and how to do it.

They may not all be applicable for everyone, but I promise you that you’ll be able to apply at least half of these to save money on household bills.

 

How Should I Use This Article To Best Cut My Household Bills?

The first thing you should do, if you haven’t already is to create a detailed budget. I would recommend using the Moneystepper Savings Challenge Budget Spreadsheet. Not only is this free, but hundreds of people are now using it to record their budget (and net worth) each month and accelerate their journey towards financial freedom. You can download it for free by clicking the link below:

Related Resource: Moneystepper Excel Budget (Free Download)

Note – this is our latest draft document for the 2016 savings challenge and is therefore still a work in progress. I will update this link each time a new version is released.

So, I would recommend bookmarking this page and going to complete your detailed budget before you continue (you may need to bookmark it anyway given that it’s almost 30,000 words (more than most novels) and there are 111  ways to save money on household bills to get through!

Once you have completed your budget, I would recommend that you list all of your expenses in descending order, with your largest household bills at the top and your smallest household bills at the bottom.

The sections in the 111 ways to save money on household bills below are designed to be in this same order, but obviously this will vary for each person and household.

 

Reduce Your Household Bills – Do I Need It & Can I Reduce It?

The next step is to attack each household bill in this descending order of amount. For each and every household expense, you should follow this flowchart:

If you are unsure what the “30 day test” is, it’s a simple concept whereby you write a single item that you want, but don’t need, on a piece of paper. If, after 30 days (or any other time frame of your choosing, but I would recommend a MINIMUM of 30 days), that is still the one thing that you want (but don’t need), then you can go and look to buy it.

However, once you replace that item with a different “want” that then stays on the paper for 30 days. This stops you buying things on a whim!

So, take every major expense in descending order of cost, and put it against the flowchart. Here goes. If you wish, you can jump to a specific section by clicking the links below:

• Housing Costs
• Taxes
• Car Expenses
• Insurance
• Credit Cards & Loans
• Gas & Electricity
• Mobile Phones
• Home, TV & Broadband
• Groceries
• Subscriptions
• Clothes
• Travel & Holidays
• Entertainment
• Vices
• Childcare
• Personal Care
• Other Miscellaneous

 

Ways To Save Money On Household Bills – Housing Costs

Housing costs (whether it’s a mortgage or rent) will be the biggest cost in most peoples’ budgets. I won’t do this for every single section, but when you look at the flowchart, you will look at the following:

Do I need it? That is, could I survive without it? The answer for a roof over your head is clearly “Yes, I need it”!

Again, it’s a pretty clear one that we do need it now? Having no accommodation for the next 3 months isn’t going to help us much…

 Now, this is where the big decision usually comes in. Yes, we may be able to get it cheaper. Therefore, it’s time to explore how we can save money on housing costs:

 

#01 – Housing Costs – Remortgage

If you are a homeowner, the likelihood is that you are paying a mortgage. If you are not currently in a fixed rate period (or even if you are and you’re in a very bad one!), you could save hundreds every week by remortgaging.

For instance, the Chelsea Building Society have some cracking fixed rates. But when these end, the standard variable rate goes to 5.45%.

However, there is currently a 2 year fixed rate at Bank of England Base Rate (currently 0.5%) plus 0.48%, with a £1,545 product fee.

According to Rightmove, the average semi-detached property in London last year fetched £560k. Say you have a 65% mortgage on that amount, totaling £364,000. On a 25 year mortgage on the standard variable rate (SVR), you’ll be paying around £1,580 per month in interest alone, with your total monthly repayment being around £2,242 per month.

However, if you jumped over to the 0.98% rate, the interest payment would fall dramatically to £280 per month, with the total repayment falling to £2,069 per month (with a much larger proportion going to capital repayments and therefore reducing the interest in future periods as well).

Your “cost” – the mortgage interest – has fallen in this example by £1,300 per month. So, whilst it may seem a lot to pay that £1,545 product fee upfront, it pays itself back within the first two months!

We do not endorse this product, and there may be cheaper products available – it is simply for illustration purposes of how much you could save by remortgaging if you are currently on a standard variable rate with your lender.

ACTION POINT: CALCULATE HOW MUCH YOU COULD SAVE BY COMPARING THE BEST MORTGAGE DEALS ON THE MARKET.

 

#02 – Housing Costs – Change Your Mortgage Payment Date

It may be obvious that remortgaging to a lower rate could save you money on your housing costs, but a lesser known tip is changing the date which you pay your mortgage.

Interest on the vast majority of mortgages is calculated daily and then charged to the account at the end of the month. Therefore, if you move your payment from the last day of the month to the first, you could reduce your interest charge quite significantly.

The best thing about this trick is that you can actually do it whilst you’re still in your “fixed” mortgage period, although terms and conditions may apply.

I’ll use the same example. If you stayed on the 5.45% standard variable rate for the entire 25 years, and you made your repayment on the last day of every month, then you would incur interest of £294,794 over the course of the 25 years.

However, if you made your repayment at the beginning of every month, and you paid the same amount as you would anyway, you would actually end up paying off your mortgage 3 months early and, more importantly, your total interest paid over the 25 years would drop to £288,766.

This is a saving of over £6,000 in this example, which is a nice chunk when you consider that all you did was change your payment date.

ACTION POINT: CONTACT YOUR MORTGAGE PROVIDER TO SEE IF YOU ARE PERMITTED TO CHANGE THE MORTGAGE PAYMENT DATE WITHOUT INCURRING ANY FEES OR CHARGES.

 

#03 – Housing Costs – Renegotiate Your Rent

Renting doesn’t mean you have to be a slave to your landlord and always accept those annual rent increases that they keep trying to throw your way. In fact, it’s quite the opposite. If you are a “good” tenant, you will often hold much more power than you think.

Say you are paying £700 per month rent to your landlord for the past 11 months and you’ve been an exemplary tenant. You have a look at the rental market in your area and you conclude that rents have generally stayed the same over the past year (which would make sense due to the near 0% inflationary environment we are currently in).

Now, most landlords will try to increase your rent, maybe to £725 per month. What do most tenants do? “Ah, that’s annoying but it’s only £25 per month and it’ll be a right hassle to move”.

But, why do landlords increase their rents even when the local market stays stagnant? Because they know that this will be your response.

Instead, be proactive. If 11 months have gone on your 12 month rental contract, approach your landlord and say “I can see that rents in the local market are stagnant, and I’ve been a perfect tenant for the past year. I’d like to sign up for another year, but I’m only willing to pay £675 per month.”

If you can throw in examples of how you’ve looked after the property and saved them hassle (even if it’s only changing your own lightbulbs, etc), then this will help as well.

This sounds incredibly cheeky, doesn’t it? But, put yourself in your landlord’s shoes for a second. They have two options. They can either accept your terms – in which case they will get £8,100 income on the property from a tenant that they already know and trust.

Or, they can kick you out and find a new tenant at £700 – not only is this harder than it sounds, the tenant has to consider the other related costs. They’ll pay AT LEAST half of one month’s rent to find a new tenant. So, that is £350 spent. And what would their annual income be if they rented out at £700 per month for that year? £8,400.

So, by the time they take their income and take off the £350 finder’s fee, they’d make more money by sticking with you. Combine that with the possibility that the landlord may not find someone straight away (voids are VERY expensive for landlords), and the fact that the new tenant would be an “unknown” and suddenly your suggestion doesn’t seem all that crazy. In fact, maybe you should only offer £650 per month for the next year if you are sure that the market rate is still £700.

Don’t be afraid to have these conversations will your landlord, and feel free to quote these types of figures to make it clear that (even if you are paying less per month), they aren’t necessarily losing out compared to the alternatives.

ACTION POINT: DON’T BE SCARED TO CONTACT YOUR LANDLORD PRIOR TO THE END OF YOUR RENTAL PERIOD.

 

#04 – Housing Costs – Sign A Longer (Or Shorter) Lease

Another way to reduce your monthly rent may be by signing up to a shorter or longer lease in line with your landlord’s desires.

Maybe your landlord is unsure what they are doing with the house, and so would give you a reduced rate if you went on to a 3-month rolling rental contract?

Alternatively, maybe they want the stability and, if you are sure that you’ll be in that place for a while (maybe you are paying down debt and are a fair while away from getting your deposit together to buy a house), then signing up to a 2 or 3 year deal instead of a 1 year deal may entice your landlord into accepting lower rent.

Landlord’s tend to like stability and consistency. If you can guarantee them the rental income which makes their property profitable to them for the next three years (even if it may be below market rate) many will bite your hand off for such a guaranteed stream of income.

ACTION POINT: SPEAK TO YOUR LANDLORD ABOUT HOW LONG THEY WOULD LIKE YOU TO STAY IN THE PROPERTY AND TRY TO NEGOTIATE LOWER RENTS (OR RENT FREEZES) IF YOU SIGN SHORTER OR LONGER THAN STANDARD CONTRACT TERMS.

 

#05 – Housing Costs – Do You Need Such A Big Place?

If you are renting a property and you are looking to make savings to your monthly budget, it may be worth considering if you really need everything that you are paying for. Have a think about where you are living? Can you really justify having two bedrooms when you only use one as a “spare room”? Do you really need to be paying extra just to have a huge kitchen? What about the area you are in? Do you really need to live in the city center because you’ve got “everything on your doorstep” – even though you only use them once every few months?

If you are looking to save up for a house deposit, or just generally looking for ways to save money on household bills, then temporarily “moving down” in property might be a good choice for you financially. This could be moving back in with your parents for a while, finding a flat share rather than having your own place, or simply just finding a smaller place.

A quick random look on Rightmove will give us a good example! Say as an example, you’re renting on the River side of Kings’ Cross (WC1H 8BB). A standard two bedroom flat is £1,950 per month.

If you are willing to downsize to a one-bedroom flat and move a mile and a half further out, then a similar quality flat in a similar standard area is only £950. For anyone not living in London, paying £950 for a 1 bedroom flat in London may seem crazy, but it’s a huge saving of £1,000 a month if you are willing to give up a bit of space and compromise on location.

Even better, you could get a room in an existing house, with bills included in the same area for only £110 per week, which would equate to around £500 per month. Yes, you only get one single room to yourself and you’ll have to share other areas of the house, but for a difference of almost £1,500 a month, just think how much quicker you’ll be able to save up for your own deposit. Anyway, you might find out you love living with other people!!

ACTION POINT: ASK YOURSELF BRUTALLY IF YOU REALLY NEED TO BE SPENDING AS MUCH AS YOU ARE. HAVE A LOOK ON RIGHTMOVE AND SPAREROOM AND SEE HOW MUCH YOU COULD BE SAVING BY CHANGING YOUR LIVING ARRANGEMENTS.

 

#06 – Housing Costs – Have You Considered Being A Property Guardian?

This is an extension of point 5 above, but will be something that I’m guessing you’ve not come across before. The concept is a little bit of a strange one. Effectively, you are paid by a property management company to live in (and look after) an unused property. The idea is that by you living there you will defer squatters, keep the property safe and it means the owners can make some income whilst the property is empty.

It’s basically legal squatting, where you pay a highly reduced rent, but if you are the adventurous type, there’s some awesome opportunities out there. The two biggest vacant property specialists are Camelot Europe and Ad Hoc Properties

A quick search in my local area shows a 5-bedroom vicarage 25 minutes from Newcastle-upon-Tyne, with a garage, patio doors, new carpets, freshly painted, new boiler, electric shower and new furniture.

And here’s the best bit – including Council Tax and Water bills – its £170 per….MONTH! So, as long as you are willing to be super flexible, you are employed and you are willing to give up some of your renters’ rights (for example, they could ask you to move out at a weeks’ notice) this could be an option for you.

To compare a property to the rental examples we were looking above, there is accommodation available in Blackfriars (5 minute walk from The Thames) for £110 per week. What’s the catch? It’s in a vacant office block – but one with bedrooms, kitchens and bathrooms.

ACTION POINT: IF YOU ARE REALLY FLEXIBLE, WILLING TO SHARE WITH OTHERS AND “ROUGH IT A LITTLE” THIS CAN BE A MASSIVE CASH SAVER. WARNING: IT’S NOT FOR THE FAINT HEARTED!

 

#07 – Housing Costs – Could You Rent Out A Room In Your House?

In tips 5 & 6, we’ve looked at how you can save money on housing costs by moving into a smaller home, or to a different area. However, for homeowners (and renters with permission of their landlords), you could cut your costs by renting out a room in your home.

Using sites such as the aforementioned Spareroom or EasyRoommate, or even just through Gumtree, you can probably quite easily find a new tenant to rent out a bedroom in your house. This will give you a nice monthly income which you can use to pay down extra on your mortgage, or to reduce the amount that you are actually paying in rent or mortgage payments.

Related Article: Renting A Room In Your Home To Earn Extra Income (Moneystepper)

In this article, we’ve explored the process in detail (including legal issues, taxes, safety concerns and much more). People might argue that having someone rent a room in your house can cause a significant disruption to your living arrangement. Well, yes, it could. But, if it is well managed, it will have an even more significant reduction on your household bills.

For example, the average double bedroom let out on EasyRoommate in London is £650 per month. Imagine you are willing to do this long-term. This money alone (invested at 10% per annum) for 30 years would make you a millionaire!!

ACTION POINT: THINK ABOUT WHETHER YOUR SPARE ROOM IS REALLY WORTH AS MUCH AS THE INCOME YOU COULD BE EARNING IF YOU RENT IT OUT. IF YOU WANT TO RENT OUT A ROOM IN YOUR HOME, READ THE LINKED ARTICLE ABOVE CAREFULLY!

 

#08 – Housing Costs – Could You Rent Out Your Driveway?

But, why just stop at your spare room? If you are not using some space outside your front door, you could be earning more income, which you could be netting off against your monthly expenses in order to save money on your household bills.

Related Article: Make Money Renting A Driveway (Moneystepper)

Again, if you are living in central London, parking spaces are going on Rightmove for anywhere up to £75 per week. However, if you live anywhere near a place of employment (city centre, hospital, schools, etc), you’ll be surprised how much value you might be leaving in your empty driveway.

You could reasonably be making up to £2,000 a year with little to no effort by allowing someone to park at your property.

ACTION POINT: EITHER LIST YOUR DRIVEWAY ON RIGHTMOVE, OR WORK WITH A SPECIALIST WEBSITE SUCH AS PARKATMYHOUSE.COM OR PARKINGPANDA.COM. THESE SITES CHARGE A FEE, BUT WILL SAVE YOU THE HASSLE OF HAVING TO FIND A “TENANT” FOR YOUR DRIVEWAY.

 

Ways To Save Money On Household Bills – Taxes

Taxes may not seem like a “household bill”, but they are one of the largest expenditures that households will incur every month and year. Therefore, you need to make sure that you aren’t paying more than you should be.

 

#09 – Taxes – Check Your Council Tax Band

Council Tax is just something you’ve always paid, right? Well, according to some estimates, almost half a million homes in the UK could be in the wrong council tax band, which could mean that you could be paying more than you should be.

Council tax bands are generally set by the value of your property in 1991. For instance, if your property was worth between £40,001 and £52,000, you would be in Band B. £52,001 to £68,000 puts you in band C. And so on.

There’s an easy way to check this and to determine if you could save money on household bills by slashing your council tax costs:

1. Go to this government website and enter your postcode. This will tell you the band for you and your neighbours (people in the same postcode). Therefore, if everyone else on your street is band B and you are band C, then you might well be in the wrong category.
2. Find a neighbour’s property from a different band and compare your houses. The closest comparison you can find which is in a different band, the better chance you have of getting compensation.
3. Now, you need to try to value your property as per 1991. The best way is to head to the house prices section on Zoopla and put in your postcode. That will then show you previous sales prices – take the price the closest to 1991. The closer you are to 1991, the better your estimate will be and the more likely you are to have a claim upheld.
4. Finally, head to the Nationwide House Price Calculator. Put Valuation year 1 as 1991 Q1, and the Valuation 2 year as the date you found in step 3 above. Then, a little bit of trial and error with the “property value” will pop out a Valuation Date 2 amount equal to the sales price from step 3 above.
5. Finally, if after this you believe that you are in the wrong band and should be moved into a cheaper band, you can click on your property in the link in step 1 and you’ll see another link to “Do you think this Council Tax band is wrong?” where you can contact the Valuation Office Agency (VOA) to discuss your case and make a formal challenge if necessary. You can contact them on 0300 0501501 (Mon – Fri 8:30am to 5pm). Also, you can visit the Council Tax Appeals gov.uk site where you can download an application to challenge your Council Tax band.

That mind sound like a lot of work, but the rewards can be monumental. Imagine that you lived in the country’s most expensive area for council tax: Weymouth & Portland. The difference between Band D and Band E is a whopping £390 a year.

The amazing thing is that not only can you change your band going forward, but you’ll be entitled to compensation for every single year going back to when you bought the property, or 1993, whichever is earlier.

There are reports online of people getting thousands of pounds back in compensation – maybe you could be next.

ACTION POINT: CHECK THAT YOU ARE IN THE CORRECT COUNCIL TAX BAND BY FOLLOWING OUR 5-STEP GUIDE. IF YOU DON’T THINK YOU ARE, MAKE A FORMAL APPEAL TO THE VALUATION OFFICE AGENCY (VOA).

 

#10 – Taxes – Check Your Tax Code / Self-Assessment Returns

And it’s not just your council tax that the taxman might have got wrong. In the UK, income tax is paid via “Pay As You Earn” (PAYE) and the amount of income tax you pay on this scheme is automatically calculated using many variables, one of the most important of which is your tax code. The taxman calculates your tax code, and it is used by your employer to determine how much tax to take out of your wages each month and hand over to the government.

However, it’s estimated that thousands of people may have the incorrect tax code and could be overpaying their tax. If that is the case, you could be due a healthy tax refund.

Your tax code is shown on your payslips or on your P45. It is made up of numbers (either three or four) and one letter. The number shows how much you can earn in a tax year before your employer needs to deduct tax, divided by ten. So for 2015/16, the majority of people will have the number 1060 (being the annual income tax allowance of £10,600 divided by 10).

The letter is related to your circumstance. The most frequently noted code will be “L”, which means that you have a standard personal allowance, but you can find all the letter codes on the gov.uk website.

The most common situation for incorrect tax codes is where you are placed as the standard 1060L, but in fact you have some circumstances that suggest you should be otherwise.

Some other common examples of non-standard codes would be if you have multiple jobs, you’ve been living out of the UK, you’re retired, you receive tax credits or you have significant employee benefits (company car, healthcare, paid for accommodation, etc).

Also, for the self-employed (and other people who need to fill out self-assessment), make sure that you avoid mistakes on your returns. It’s usually a good idea to pay a professional to take a look at your return to make sure you aren’t paying more tax than you should be.

ACTION POINT: WITH THE HELP OF THE .GOV.UK WEBSITE, TRY TO WORK OUT WHAT YOUR TAX CODE SHOULD BE. CHECK THIS AGAINST YOUR PAYSLIPS, AND IF THERE IS A DISCREPANCY, SPEAK WITH THE HMRC TO GET IT RESOLVED.

 

 

#11 – Taxes – Make Sure You’ve “Tax Wrapped” Your Investments

One of the biggest things I’ve learned from writing Moneystepper is that you shouldn’t pay tax twice. This is so important that it actually made it into one of my top 10 learning lessons from Moneystepper – a PDF that you can get free by signing up to the mailing list in the sidebar of at the top of this page.

If you plan your investments badly, you could find that you pay tax when you earn the money, pay tax again on that money when you invest it, and pay it again when you die through inheritance tax.

However, for the majority of people, you should be able to “tax-wrap” your investments to make sure that the tax man doesn’t get paid twice or more at your expense.

The two most common tax-wrappers for your investments are pensions and ISAs. For a more detailed explanation for your exact situation, check out our comparison of ISAs vs pensions.

As a very quick summary, we recommend you follow this order of your long term investing to maximize your returns and minimize your tax:

• Make pension contributions up to your employer’s matched pension limit
• Maximise your ISA contributions up to the annual maximum limits (currently £15,240)
• Maximise your pension contributions up to the total annual maximum limit (currently £40,000)

Most people won’t get beyond these amounts (£55,240 per annum in long-term investments). Even if you do, then there are other options available to investors who still don’t want to pay tax on their investment returns, such as investing in VCTs or EISs. In fact, did you know that you can even write off an income tax liability of up to 30% of the amount of your VCT investments, so not only do you not pay tax on your investments, you can save tax on your income!

ACTION POINT: NEVER PAY TAX ON YOUR INVESTMENTS BY INVESTING VIA PENSIONS AND ISAS. DETERMINE YOUR SPLIT BETWEEN ISA AND PENSION INVESTING BY READING OUR COMPARISON GUIDE LINKED ABOVE.

 

#12 – Taxes – Plan Your Investments Against Future Taxes

Not only should you protect your current investments against tax, but also your future self. For example, we often receive questions from people who are about to sell investment property and are suddenly surprised that they are going to face a substantial capital gains bill.

Equally, people who don’t plan properly could end up with inheritance tax bills, but if your estate is planned well enough (and your heirs understand the inheritance tax rules), the majority of people can avoid this tax.

ACTION POINT: TAKE A LOOK AT YOUR OVERALL INVESTMENT STRATEGY AND MAKE SURE YOU UNDERSTAND WHAT TAX WILL BE DUE IN THE FUTURE.

 

#13 – Taxes – Make Sure You Never Miss Your Deadlines

This is a criminal mistake – in every sense of the word. For people submitting self-assessment tax returns (and for small businesses), not submitting your tax return will hit you with a late filing penalty of £100, and then you’ll start to pay interest after that.

ACTION POINT: MAKE SURE YOU KNOW YOUR TAX SUMBISSION DEADLINES AND PUT REMINDERS IN YOUR DIARY TO ENSURE THAT YOU DON’T MISS THEM.

 

#14 – Taxes – Junior ISAs

It’s not only you who should be avoiding tax, but your babies and children as well! J

Many new parents want to invest for their children. Firstly, you should be considering whether you want to save for your children in your own tax-wrapped accounts or one’s in their own names. There are many reasons to choose your own accounts to save for your children (we’ve made a full article on How You Should Save For Your Children.

But, if you do decide to save and invest for your children in their own accounts, then you should definitely make sure that you aren’t paying taxes on this either. Junior ISAs allow £4,080 in the 2015/16 tax year to be invested without incurring any capital gains taxes on future gains, or income tax on interest or dividend income.

ACTION POINT: EVEN IF YOU ARE SAVING FOR YOUR CHILDREN IN THEIR OWN NAMES, MAKE SURE YOU ARE AVOIDING UNNECESSARY TAXES.

 

#15 – Taxes – Gift Aid

Finally, by understanding your tax benefits, you can actually save money in your monthly budget by taking advantage of Gift Aid.

Essentially, using Gift Aid means that the taxman will add 25p to every £1 you give to charity. Therefore, say you’ve decided that you want to give someone £40, then you could actually reduce your charitable donation to £32 with Gift Aid making the rest up to the £40 total that you want to invest.

That effectively saves you that £8 in your monthly budget and the person you are sponsoring still gets their £40. Win-win!!

Gift Aid is available to everyone, limited up to a maximum of 4 times what you have paid in tax in that year. For most people, this limit won’t come into play and so the vast majority of people can receive gift aid on their donations.

However, this is often not done automatically, so you’ll have to select a box if you are making your investment through JustGiving or something similar, or you may have to provide your details if you are making a direct donation so that the person raising money for charity can top-up that 25% through Gift Aid on your behalf.

ACTION POINT: MAKE SURE THAT YOU USE GIFT AID WHEN MAKING YOUR CHARITABLE DONATIONS SAVING YOU 25% ON YOUR GIVING.

 

Ways To Save Money On Household Bills – Car Expenses

I have no idea why this is the case, but it’s deeply ingrained in the British psyche that car expenditure is just something we have to deal with. Whether it be petrol, repairs, MOTs, insurance or the car purchase and related financing, people seem to be more willing to spend money on their car than almost anything else.

Well, not on our plan. The car is just another line in the budget. And, as such, we will ask the same questions? Do we need it? Do we really need it? Can we get it cheaper? For most areas of car expenditure, the answer will usually (but not always) be “Yes” to question one and two, but it’s almost always “Yes” for whether you can cut those expenses down.

 

#16 – Car Expenses – Downsize Your Car

The first way to save money on car expenses is to work out whether you need your car at all. The biggest “downsize” possible is to get rid of your car completely! Most people will baulk at this idea, but for many (especially those who live in the city centre or have two vehicles) it is a real possibility. With a combination of public transport, pedal power, home deliveries and car hire when you really need it, you might be able to get rid of your car altogether and save yourself from a multitude of related car expenditure.

For example, we lived in Marseille for two years without a car, and after a month or two this became the norm. Once or twice, this was an inconvenience, but for the huge amount of cash we saved, we simply paid for car hire (which can be surprisingly cheap when booked in advance – as low as £15 for a day) or taxis in those situations. Trust me, you have to take a lot of taxis, bus rides and train journeys in a month to spend as much as you would running a car.

Related Article: Save Money On Car Hire

If you can’t drop your car, then you might want to consider downsizing. Smaller cars will cost less in ongoing costs such as repairs, use less petrol and will cost less in the first place. Just like with your home, ask yourself: “do I really need all that car?”

ACTION POINT: CONSIDER IF YOU CAN LIVE WITHOUT A CAR. IF NOT, AND YOU NEED TO SAVE MONEY ON YOUR HOUSEHOLD BILLS, CONSIDER DOWNSIZING YOUR VEHICLE IN ORDER TO SLASH YOUR CAR EXPENSES.

 

#17 – Car Expenses – Going Green

Going green – i.e. choosing a car with low emissions – is obviously good for the environment. However, it could also be good for your wallet. Low emission vehicles have many areas where they could be cheaper. Firstly, they are more fuel efficient and so you will slash your petrol expenses.

You will also receive huge discounts on your road tax. At the extremes, Band M road tax (many large 4x4s and convertibles) is £505 per year, whereas Band A road tax (many hybrids and smart vehicles) is £0 – that’s right, it’s absolutely free!

The savings don’t end there either. Most councils will offer reductions on parking permits for low emission vehicles. For instance, in Newcastle-upon-Tyne, for bands A-C (under 120 g/km), you’ll receive a 50% discount on your parking permit. The same is true for hundreds of councils nationwide.

This is also extended to businesses. For example, the purchase of a low emission vehicle allows the business to place 100% of the purchase cost against profits in the year to reduce their corporation tax bill.

ACTION POINT: WORK OUT THE FINANCIAL BENEFITS OF GETTING A LOWER EMISSIONS VEHICLE. THESE CAN OFTEN COST A LITTLE MORE UP FRONT, BUT THIS CAN QUICKLY BE PAID BACK VIA THE MONTHLY REDUCTION IN THE EXPENSES.

 

#18 – Car Expenses – Buy Second Hand

This is one of the most debated subjects in the world of personal finance. Buying new vs buying second hand.

The argument for buying new cars is that you know what you are getting, and that you’ll save a significant amount of money on the repairs and maintenance which an older car would require.

In my opinion, this is rubbish! The most significant factor in this debate is the value that a new car loses the minute it is driven off the forecourt. The best demonstration is probably via an example.

The pictures above show a Vauxhall Corsa 1.0 Sting 3-door. The first image is the price of buying new from Bristol Street Motors if you pay cash: £12,995. The second image below is the price of buying second hand through a private seller – the same car but with 3,400 miles on the clock and only 9 months old – only £4,100:

 

To those who argue to go new due to repairs, you can get a hell of a lot of repair work done for the £8,800 difference in the cost of these two vehicles. Very easy choice as far as I’m concerned.

This will shock people (especially those who think buying new is the norm), but Dave Ramsey (US personal finance guru) recommends that you don’t buy a new car unless you have a $1 million net worth. To be honest, I couldn’t agree more. A more detailed explanation of why can be found in our prior article about buying new vs second hand cars. Tip: watch the TED talk video for a real shock about car financing!

ACTION POINT: DON’T BUY A NEW CAR (ESPECIALLY ON FINANCE OR PCP – SEE #20), BUT INSTEAD SHOP AROUND FOR A GOOD CONDITION RELIABLE SECOND HAND CAR WHICH FITS IN WITH YOUR BUDGET.

 

#19 – Car Expenses – Find A Good, Trustworthy Local Mechanic

When it comes to car expenses, getting repairs done at your manufacturers’ or dealers’ garage is the equivalent of shopping at the Hugo Boss store. Yes, the waiting seats are comfortable and everything looks flashy, but you are basically paying a hell of a lot of cash for very little.

According to recent research, franchised dealers’ quotes are generally up to 20% more expensive than independent garages. It also showed that the average timing belt replacement quote was over 60% more expensive with the franchised dealer than the smaller independent outfits – for exactly the same job!

However, people often go with the franchised dealer because they feel more comfortable with them and are worried about getting ripped off by an independent garage or mechanic.

How do you get over this? By working down the following four steps:

1. Speak to people you know and online reviews in order to find 2-3 cheaper, but reliable independent garages in your area.
2. Next time you have a minor problem with your car, take it to the franchised dealership and these independent garages to get a quote from each for your work.
3. Also, ask each to estimate how long they think it will take to complete the job (independent garages can be slower than franchised dealers if you don’t agree a timetable up front).
4. Go with the cheapest quote and see how the experience is compared to your usual option.

I use an independent garage for our MOT and all repairs and I now have such a good relationship with them that I am confident that they will provide the cheapest and reliable service I can find. Once you build that relationship, you’ll find that the garage will even do smaller jobs for free because they know that if they do, you are likely to come back for more significant work.

If you followed our advice in #18 and bought second hand, you may find that you have a few more things that rattle and shake on your car and you need to visit the garage slightly more often. If that’s the case, then finding the best value (and most reliable) mechanic in your area is a must to save money on your car expenses!

ACTION POINT: GET ADVICE FROM FRIENDS AND FAMILY (AND ON THE INTERNET) REGARDING LOCAL INDEPENDENT GARGAGES. FOR A SMALL JOB, GET QUOTES FROM EACH AND TRY OUT THE CHEAPEST – YOU’LL SOON KNOW IF THEY ARE A GOOD FIT FOR YOU!

 

#20 – Car Expenses – Refinance Your Car Payment (inc. PCP)

As we said in #18, you shouldn’t buy a brand new car unless you have a monumental net worth. If you’ve already bought one, then you can still take some action today in order to reduce your monthly expenses.

Many people who buy new cars do so through financing. It seems a lot more appealing buying a new car when it only costs £399 a month instead of £12,000 upfront. However, the average person who finances cars will end up paying over £100,000 in interest alone over their lifetime.

If you’ve signed up to car financing at anything other than 0% interest (including those horrible PCP deals), and you are wanting to cut back on your monthly costs, it will probably be worth investigating how much it will cost you to dig yourself out of your hole.

Again, you can do this by following this 4-step guide:

1. Work out how much your current car is actually worth if you sold it today. You can do this by looking at the sales values of very similar cars on sites like autotrader.
2. Calculate how much you “owe” on your car today (usually this will be a loan balance).
3. Work out how much you will end up paying on the vehicle over its life if you carry on doing nothing.
4. Identify a second hand car you would buy to replace your vehicle.

Let’s use an example. Imagine that we had purchased a VW Golf Match 1.4 Tsi 3Dr one year ago on a PCP deal. We were sucked into the “48 monthly payments of £199” sales pitch. In reality, we signed up to paying £2,499 deposit, fees of £185 and then payments over 48 months at 7.2% APR. D’oh!!

But, that is all sunk costs. Learn from our mistakes and put this behind us. Instead, we need to work through the steps.

1. A quick search on Autotrader shows us that a similar vehicle with 4,000 miles on the clock which is only one year old sells for around £15,000.
2. The easiest way to do this would be to phone the dealer or PCP provider. Based on my maths, after 12 months, you would have £13,904 still to pay on the finance, plus fees of £185. There may be some clauses in the PCP contract, but we’ll assume that you can get out of the deal by repaying the remaining debt plus the fees for a total of £14,089.
3. If you carried on repaying on the PCP deal, the total repayments would be £22,019. Therefore, you’ve saved yourself almost £8,000 by getting out of this deal.
4. Then, you can use the £1,000 that you have gained from selling your car second hand compared to what you paid to get out of the PCP to buy an older second hand car. You now have a second hand car instead of a new car, but your monthly payments have disappeared and you have saved £199 a month on your household bills!

Alternatively in this example, if you wanted a nicer car, you could put £3,000 capital towards buying the car in #18 above. Then, you have the same aged car, with the same miles, but still you won’t have any monthly payments.

Finally, if you haven’t got that £3,000 to put towards your replacement car, you might want to consider 0% balance transfer (or money transfers) so that you’ll be paying the equivalent of less than 1% APR instead of the typical 7-15% that comes with car financing!

ACTION POINT: BUYING NEW CARS (ESPECIALLY WITH FINANCE) IS SIMPLY NOT CONDUCIVE TO BUILDING LONG TERM WEALTH. THEREFORE, THE NEXT TIME YOU ARE BUYING, GO SECOND HAND. AND IF YOU’VE ALREADY BOUGHT NEW, WORK THROUGH OUR GUIDE TO DETERMINE WHETHER IT’S WORTHWHILE SELLING YOUR NEW CAR AND REPLACING IT WITH AN OLDER SECOND HAND VEHICLE.

 

#21 – Car Expenses – Buy Tyres Online

This is a nice sneaky tip to reduce those household bills when you need a new set of tyres for your car. You can buy tyres for your car through ASDA tyres, and not only do you get the best tyres for much cheaper, you can also get them delivered to a local garage who will then fit them free of charge, sort valves, balance and dispose of your old tyres.

ACTION POINT: GO TO ASDATYRES.CO.UK, ENTER YOUR REGISTRATION AND THEY’LL COMPARE THE COST OF DIFFERENT TYRES FOR YOUR VEHICLE, AND GUIDE YOU TO WHERE YOU CAN GET THEM FITTED FOR FREE.

 

#22 – Car Expenses – Learn Simple Car Maintenance

I’m not recommending that you get your overalls on and head under your car to replace the key components. More often than not, it’s safer, quicker and cheaper (when you think in terms of “hourly value”) to let your new trusted local garage that you found in tip #19 do that for you.

However, it’s a good idea to get clued up about basic car maintenance. I’m talking about the easy stuff – keeping the oil topped up, keeping your tyres pumped to the proper temperature, making sure the water levels are right, etc.

You can learn all this in under an hour with the help of a friend with some knowledge of cars, or from youtube video tutorials. It may not save you every single month, but it will certainly save you on big one off costs when you avoid a large repair that was caused by simple negligence to the basics.

ACTION POINT: LEARN THE BASICS OF CAR MAINTENANCE TO AVOID BIG COSTS LATER ON – A STITCH IN TIME SAVES NINE, AND ALL THAT…

 

#23 – Car Expenses – Shop Around For Your Petrol

Petrol prices go up and down like no-ones business in the UK. Dependent on the commodity prices, forward contracts, delivery costs and all other manner of things, it’s impossible to guess how much a gallon of petrol will cost you next month.

However, one thing you can do, is work out where to get the cheapest petrol. Just as you might shop around to get the cheapest deals on groceries, electronics or clothes, petrol prices can vary hugely within only a few miles.

A first obvious one is to avoid motorway petrol stations wherever possible. For example, a search around Durham, UK, shows that petrol at a local supermarket petrol station is 108.9p per litre, whereas the A1(M) services is 117.9p, over 8% more expensive.

The less obvious tip is that you can find the cheapest petrol in your area by signing up to the free website: petrolprices.com. A quick search for a 5 mile radius of Leeds for instance, shows me straight away three places where I can get unleaded petrol for 107.7p per litre, whereas the average price in the city is 111.2p and the highest price is 114.9p.

If you use £150 of petrol a month (not unusual for a regular city commuter), you could be saving over £10 every month by going to the cheaper stations to refill.

ACTION POINT: SEARCH YOUR LOCAL AREA TO DETERMINE WHERE TO GET THE CHEAPEST PETROL. HOWEVER, PLEASE DON’T DRIVE 30 MINUTES OUT OF YOUR WAY TO SAVE A FEW PENCE ON YOUR PETROL – REMEMBER THE HOURLY VALUE CONCEPT!

 

#24 – Car Expenses – Change Your Driving Style

In a small experiment that I carried out in November 2014 on improving fuel mileage by driving sensibly, I found that I was able to increase my miles per gallon by over 25% by making just a few small changes.

This can be summarized into:

1. Driving in the highest gear possible
2. Avoiding high speeds (optimal fuel efficiency is at 55mph)
3. Not accelerating too quickly
4. Avoiding heavy breaking
5. Maintaining the correct tyre pressure
6. Not leaving the car idle
7. Removing unnecessary weight from the car

In the month of the test, I managed to improve my average miles per gallon (mpg) from 38.7 to 48.2 through these techniques alone.

This has an obvious beneficial impact on saving money on your household bills through reduced petrol consumption, but a more unmeasured impact on safety, reduction in maintenance costs in the long-term (break pads, tyres, etc etc) and even on your car insurance (see tip #37).

ACTION POINT: DRIVE MORE SENSIBLY AND FOLLOW OUR 7 POINT PLAN TO INCREASING YOUR AVERAGE MPG.

 

#25 – Car Expenses – Claim Repairs Caused By Potholes

“Had an accident that wasn’t your fault, claim back hundreds”…we’re fed up of hearing these adverts by now. However, one thing you may not have known is that if you’ve had a repair that wasn’t your fault (because it was caused by a pothole), you could actually claim for the damage caused.

You’ll need to prove that it was the pothole that caused the damage, but it’ll often be obvious when this is the case. Say you hit a pothole, and straight away the car is pulling to the left (or a tyre pops), then it’s pretty clear cut.

Take notes (what time it was, where exactly the pothole is) and if you can take a photograph of the pothole. Then, you’ll need your mechanic to put into writing that it was likely that the damage was indeed caused by hitting a pothole.

You then need to identify the “responsible party”. This will usually be the local council for smaller roads, and the highways agency for motorways and larger A-roads. At first, you should send a letter along with the evidence of the damage and the invoice/receipt for the repair work. Often, this will be successful and the responsible party will send you a cheque in the post.

Unfortunately, life isn’t always that easy. If that fails, you are going to have to make a full claim including getting the road repair policy and inspection history for the road where the pothole was, reviewing inspection logs and all manner of other things. Then, the responsible party may pay your compensation (either in full, or try to make a compromise). If they still reject your claim, and you are sure that you are in the right, you can take it to the small claims court.

ACTION POINT: FOLLOWING REPAIR WORK THAT WAS CAUSED BY HITTING A POTHOLE, IDENTIFY THE “RESPONSIBLE PARTY” AND SEND A CLAIM (INCLUDING AS MUCH INFORMATION AS YOU HAVE) TO FIND OUT IF YOU ARE DUE COMPENSATION.

 

#26 – Car Expenses – Slash The Cost Of Breakdown Cover

People often pay way over the odds for breakdown cover. If you’ve followed our tips above regarding second hand cars, the basic breakdown cover may be right for you. If you then follow our tip #109 and use cashback sites, you’ll find that the cost of breakdown cover could be much less than you have historically been paying.

For example, the RAC standard breakdown cover for one vehicle (which includes Roadside Rescue – covers you if you are more than 0.25 miles away from home, will fix anything it can by the roadside and will tow you to a garage of your choice within 10 miles of the breakdown point) is only £27.99. Using quidco.com, you can earn £9.50 off that amount, meaning that your cover drops to only £18.49 per year.

You can add “recovery” (taking you and up to 7 passengers to any chosen location anywhere in the UK) for £27 per year, making the total £54.99. Again, with Quidco, the cashback now pops up to £18.50 and hence your annual cover is only £36.49 for the year with full recovery cover.

Compare this to the £100s that some people pay for breakdown cover and this could be an easy way to save money on your household bills!

ACTION POINT: TAKE A LOOK AT YOUR CURRENT BREAKDOWN COVER AND CONSIDER SWITCHING TO A CHEAPER PROVIDER (USING CASHBACK SITES TO MAKE THEM EVEN CHEAPER).

Ways To Save Money On Household Bills – Insurance

Whilst insurance tends to be paid annually (or at least it should be as per tip #30 below), if you work out how much you are paying in premiums each month for all of your insurance product, you’ll realise that it’s one of your largest monthly expenses. Don’t worry, we’ve got 11 tips to help you save money on your insurance costs.

 

#27 – All Insurance – The “Can I Afford Not To Have It” Rule?

Before we look into how to save money on household bills by reducing your monthly insurance premiums, I would like to share with you our overall opinion on insurance. Understanding what insurance is, and how it works, will make sure that you are not wasting money on unnecessary insurance.

Effectively, all insurance (in the long term) costs the person taking out the insurance money and makes the company which provides the insurance money. The figures shown below are representative of AON Insurance from their 2014 annual accounts. The profit and loss statements of all insurance companies effectively work in the following way:

Money you pay in premiums (revenue)                  £100
Money they pay out in claims (costs)                      (£59)
Money spent on salaries, advertising, etc              (£27)

Profit                                                                                £14

 

Therefore, for every £10 you spend on insurance premiums, less than £6 comes back to you through claims, and the remainder is split between paying the directors and employees, covering company running costs and paying the shareholders of the insurance company.

I repeat: in the long-run, insurance COSTS you money.

Our #1 rule for insurance is therefore if you can truly afford not to have the insurance cover, then don’t.

Take, for example, a biro. It costs 20p. If you broke it, you could afford to replace it, no problem. Therefore, if you could take out insurance at 5p a year, you know that on average it will only be worth 3p a year (as per the calculations above) and hence you wouldn’t take it out.

However, if you only had a net worth of £3,000 and your house burned to the ground destroying everything in it and the building itself, you couldn’t afford to rebuild it. Therefore, in this case, even though you know that ON AVERAGE you would be losing money by taking out the insurance, you couldn’t afford to pay for the worst case scenario and therefore buildings and contents insurance is a good idea.

One exception is when insurance is legally required, for example car insurance. Whilst people with a high net worth and a second hand car may not benefit from car insurance in the ways described above (i.e. they could afford to pay for repairs if they were to crash), the legal requirement to take out the insurance overrides this rule.

ACTION POINT: FOR ALL INSURANCE PRODUCTS, DETERMINE WHETHER YOUR NET WORTH ALLOWS YOU TO LIVE WITHOUT THE INSURANCE. IN THE LONG-TERM, ALL INSURANCE COSTS YOU MONEY, SO AVOID TAKING OUT UNNECESSARY POLICIES.

 

#28 – All Insurance – Compare Prices

So, you’ve determined from tip #27 that you need a certain kind of insurance because you can’t afford to live without it, or because you are legally obliged to take it out.

The next step is to perform a full market comparison of the insurance that you can obtain. This is for two main reasons:

1. The difference in costs between different providers for the same product can be absolutely enormous.
2. Due to the current environment of “introductory offers” renewing your insurance year on year rather than comparing other introductory offers elsewhere can be extremely expensive.

A small example will show you how much of a difference this can make. We have performed a search on the comparison website confused.com for car insurance for my wife and I. Using the same details, and the same levels of excess and cover, we can see the following two options:

So, you can see that if you simply went with Prudential because you saw an advert in the newspaper or because you know their name, then you’ll be paying way over double the cheapest provider. Equally, you’ll find that for renewals, your provider will shoot your premiums up in the hope that you are simply too lazy to compare prices elsewhere.

So, shop around on your insurance using confused.com to reduce your insurance premiums and save money on your household bills. However, make sure you always read the small print to ensure that you are comparing apples with apples, and that each provider gives you the same level of cover.

ACTION POINT: FOR ANY INSURNACE THAT YOU HAVE DETERMINED THAT YOU NEED, YOU CAN COMPARE PRICES FROM HUNDREDS OF INSURANCE PROVIDERS USING CONFUSED.COM TO FIND A MUCH CHEAPER INSURANCE QUOTE FOR YOUR CIRCUMSTANCES.

 

#29 – All Insurance – Consider A Higher Excess

You can see in tip #28 that we chose an excess of £100. However, by changing the “excess” that you are willing to pay, you can reduce your annual insurance premiums in order to save money on your household bills.

An “excess” is the amount of a claim that you will be liable for yourself. For example, with an insurance excess of £100, if you have a car accident and you need to claim for £300 of damage, you will only receive £200 compensation from your insurance provider.

The higher you set your excess, the cheaper your premiums will be, but the lower the amount you’ll be able to claim if you actually need to use your insurance. Therefore, choosing your level of excess is a very interesting mathematical problem.

Firstly, you need to work out why you are taking out insurance. If it’s because you have a legal requirement to, then you’ll generally want to pay a higher excess to reduce your monthly premiums, because you probably won’t be claiming anyway unless you have significant damage.

In my car insurance example, I used an excess of £100 and my lowest annual premium was £205.64. However, if I raise my voluntary excess to £500, then my premium with the same provider reduces to £191.16.

Now, this saving doesn’t seem like much (only 7%), however this might still be worthwhile as you may not be making any claims for amounts between £100 and £500 anyway (due to the value of your car, keeping your no-claims, etc).

On the other hand, with contents insurance, a common claim amount may be in this range (a burn in a carpet, etc) and hence it may be worth paying the slightly higher premium to reduce your excess.

This will be different for every single person and for each insurance policy. Therefore, our advice is to work out the difference in the insurance premiums using different levels of excess in order to work out which is best for you.

ACTION POINT: WHEN COMPARING INSURANCE PRODUCTS, RUN A COMPARISON AT EACH DIFFERENT EXCESS LEVEL TO WORK OUT THE SAVINGS IF YOU ARE WILLING TO PAY A HIGHER EXCESS.

 

#30 – All Insurance – Usually Pay Annually

Again, as you can see in the example in tip #28, insurance premiums are often much cheaper if you pay annually rather than through monthly installments.

In our example, we can either pay £205.64 if you pay annually, or you can choose monthly installments (and pay £18.74 a month) which is an annual equivalent of £224.85.

Therefore, we can either:

• Pay £205.64 upfront
• Place £205.64 into a current account earning X% interest and pay the monthly installments.

In order for the X% to make enough interest to make up the difference between £205.64 and £224.85, the interest rate would actually have to be a whopping 18.2%. Obviously, this level of return isn’t available from such short-term investments and hence it’s a no-brainer to go with the upfront payment instead of monthly installments.

Many people may just think that the difference is less than £20 so go with monthly, but that kind of thought process will make and keep you poor pretty quickly!

ACTION POINT: UNLESS MONTHLY INSTALLMENTS ARE THE SAME AS ANNUAL, TRY TO PAY ANNUALLY FOR INSURANCE PREMIUMS, OR YOU’LL END UP PAYING THE EQUIVALENT INTEREST OF MANY HIGH INTEREST CREDIT CARDS.

 

#31 – All Insurance – Secure Your Belongings

Whether you are insuring your car or your contents, you could save money by securing your belongings. For example, by having alarms fitted on houses and cars, you can reduce your insurance premiums. In addition, keeping your car indoors can often make your insurance cheaper (subject to tip #35).

Moreover, by securing your belongings, they are less likely to be stolen, so you are less likely to make a claim, to incur the insurance excess and suffer from increased future premiums because you have previously made a claim.

Finally, most insurance products will be void if you haven’t sufficiently secured your belongings. For example, if all your home contents were stolen because you left the window open, you’ll probably not receive any compensation what-so-ever from your insurance company.

ACTION POINT: SECURE YOUR BELONGINGS BY LOCKING DOORS AND FITTING ALARMS TO YOUR CARS AND HOMES. HOWEVER, AS PER TIP #35, DETERMINE WHETHER IT’S CHEAPER TO USE YOUR GARAGE OR LEAVE YOUR CAR ON THE DRIVEWAY OR ROADSIDE FOR INSURANCE PURPOSES.

 

#32 – Car Insurance – Try Adding a 2^nd (or 3^rd or 4^th…) Driver

This is another strange concept in the car insurance industry, but definitely worth exploring if you are a younger or inexperienced driver (and sometimes for anyone at all).

When completing your comparison for your car insurance with confused.com you should try adding some additional experienced drivers to your insurance policy, even if they aren’t going to drive the car.

This is especially effective for young drivers, who will be adding their parents or more experienced friends (especially those with a good history of no claims) to their policy. This is because premiums are calculated using an average of the risks that each driver on the policy poses. Therefore, the lower average overall risk, the lower the premiums.

ACTION POINT: PLAY AROUND WITH YOUR CAR INSURANCE COMPARISONS BY ADDING ADDITIONAL LOWER RISK DRIVERS (SUCH AS PARENTS) – THE MORE THE “AVERAGE RISK” FALLS, THE CHEAPER THE OVERALL PREMIUMS.

 

#33 – Car Insurance – Use Your No-Claims Bonus (But Don’t Always Protect It)

The more you drive without claiming, the cheaper your premiums will become. This very sensible and logical theory is called your “no-claims bonus” in the car insurance industry. Basically, for every extra year that you haven’t claimed, the higher reduction you can receive on the standard premiums.

With many insurance policies, there is an option to “protect your no-claims discount”, meaning that you pay higher premiums in order to retain your discount even if you need to make a claim. However, it’s worth remembering that all insurance companies do things for a reason, and that reason is ALWAYS to make the company and their shareholders more money. Therefore, on average, you’ll end up paying more in increased premiums to protect your no-claims than you would be losing it if you have a claim.

Additionally, it’s worth considering that having an accident will still probably cause your baseline premium to increase, even if the discount remains the same. Therefore, without ever having made a claim you may get a 20% discount for your no-claims on a £200 policy. If you’ve had an accident, even though you still get a 20% discount, your base policy may increase to £240, meaning that although you still have your “no claims”, it doesn’t mean that your cost can’t go up.

ACTION POINT: IF YOU’VE HAD CAR INSURANCE FOR MANY YEARS, THEN YOU SHOULD MAKE SURE YOU REPORT THIS PERIOD OF “NO-CLAIMS” TO YOUR INSURANCE PROVIDER IN ORDER TO RECEIVE A NO-CLAIMS DISCOUNT. HOWEVER, DON’T GET OVERLY HUNG UP ON PROTECTING YOUR NO CLAIMS WHEN YOU DO HAVE AN ACCIDENT.

 

#34 – Car Insurance – Use A “Blackbox” Or Driving App

A pretty cool new innovation in the insurance industry has made a positive impact on allowing sensible and responsible drivers to reduce their car insurance.

If you follow all our suggestions that we outlined in tip #24 to improve your mpg through driving more sensibly (avoiding quick acceleration, braking more slowly, etc), then you’ll be able to install a device in your car to measure this.

This may be a bespoke device provided by your insurer, or could even be an app on your smartphone. This then reports to the insurance provider that you are an excellent driver and therefore pose a lower risk of making a claim.

The issue at the minute is that these apps and devices are currently only available through the more “well-known” insurance providers. These are the companies which spend millions on product development, advertising and overheads (including HUGE director salaries and bonuses), and are therefore the providers who have the higher premiums.

That said, especially for younger and inexperienced drivers, the discounts for proving that you are a safe driver may well exceed the difference between the expensive and cheaper premiums, so will be worth exploring.

ACTION POINT: IF YOU CONSISTENTLY DRIVE SENSIBLY, THEN YOU MAY BE ABLE TO REDUCE YOUR PREMIUMS BY HAVING YOUR DRIVING STYLE MONITORED BY YOUR INSURANCE PROVIDER.

 

#35 – Car Insurance – Use Your Garage (Or Not)

As per tip #31, keeping your car in a garage or on a driveway instead of on the road will reduce your insurance premiums.

But, the insurance industry is a funny old game. The whole system of calculating premiums is a very complex affair, using incredibly deep algorithms and specific data on claims in your area.

Therefore, keeping the car on the road, or on a driveway/garage, could be cheaper for many, but also could be more expensive for some.

For example, on my same insurance quote from tip #28, by keeping my car in a garage at the same address rather than on the road, my cheapest quote increases from £205.64 to £229.02 (a whopping 11.4% increase).

ACTION POINT: WHEN COMPARING INSURANCE PRODUCTS, CHECK IF IT IS CHEAPER TO KEEP YOUR CAR ON THE ROAD, ON YOUR DRIVEWAY OR IN YOUR GARAGE. SURPRISINGLY, IT MAY ACTUALLY BE CHEAPER FOR SOME PEOPLE TO LEAVE THEIR CAR ON THE ROAD!

 

#36 – Home Insurance – Combine Buildings & Contents Insurance

As for car insurance (and in fact for any insurance under the sun), we would recommend that you complete a market-wide comparison of your home insurance through a comparison website such as confused.com.

When you do this comparison, you’ll often find that you can save a significant amount on your home insurance premiums when you take out buildings and contents insurance at the same time with the same provider.

However, don’t just automatically do this without first thinking about tip #27. Whilst buildings insurance is almost always a requirement (as houses aren’t cheap to rebuild, and it is often a mandatory requirement for being granted a mortgage); the need for contents insurance will  vary depending on the value of your contents and your net worth.

For example, my wife and I don’t currently have contents insurance as, even in the worst case scenario, we could afford to replace every single item in our house if it all disappeared tomorrow. This is because we live in a one-bedroom, second floor flat and don’t have excessive expensive consumer goods. #moneystepping and all that!

Although we clearly wouldn’t want to, it is cheaper in the long-term to run that risk rather than paying for the insurance to mitigate it.

ACTION POINT: IF YOU DECIDE THAT YOU DO NEED BOTH BUILDINGS AND CONTENTS INSURANCE, YOU COULD SAVE A HUGE AMOUNT ON YOUR PREMIUMS BY COMBINING THE TWO INTO A SINGLE POLICY.

 

#37 – Warranties – Avoid Extended Warranties

Finally, use this approach to thinking about insurance  to determine whether you should be buying certain items in the first place. Say you want to buy a £1,000 TV. You look into an extended warranty (which is essentially very similar to insurance) and you decide that if the TV broke, then you couldn’t afford to replace it and therefore, by following our rule in tip #27, that you should take out the extended warranty.

WRONG!

What this should actually be telling you is that if you can’t afford to replace the luxury item (the expensive TV), then you shouldn’t be buying it in the first place. Adding an extra monthly expenditure to cover the risk that something you can’t afford, and that you don’t need, might break in the future is financial madness.

Did you know that many products (especially expensive electronics and white goods) are sold at very, very low margins? However, retailers are often happy to make low profits or even losses on sales of these products, because they make their money through financing and extended warranties.

It is estimated that only 20% of the price that you pay for your warranty actually goes to cover the repairs of faulty products. The remaining 80% is split between overheads, admin and marketing. Nothing I want to be paying for…!

The fact that the retailer can make more money from charging interest on financing and the price of extended warranties rather than the product itself must surely tell you how bad an option taking out financing and extended warranties are.

ACTION POINT: SIMPLE – NEVER TAKE OUT AN EXTENDED WARRANTY. IF YOU CAN’T AFFORD TO REPLACE THE PRODUCT, YOU SHOULDN’T BE BUYING IT!

 

Ways To Save Money On Household Bills – Credit Cards

High interest credit cards and loans are a terrible by-product of the consumer economy that we’ve got so used to in the UK. Anyone who is paying interest at these rates is essentially paying for nothing, other than accelerated gratification which they’ve not earned.

The resolution – make a plan to pay down the high interest debt – and apply our tips below to reduce the interest that you pay, and even to start earning money through cashback and rewards.

 

#38 – Credit Cards & Loans – Make Sure You Have A Plan

Okay then, onto credit cards and loans. The very first thing you need to do if you have existing credit cards & loans is to make a plan. And I don’t mean the plan that the credit card provider has given you by making the minimum payments.

Let’s take a credit card that I actually use myself (but responsibly in order to obtain rewards and cashback – see tips #39 and #43), the Lloyds Duo Avios card, which charges an annual interest rate of 23.7%, if you don’t repay your balance in full.

The minimum monthly payments is the largest of:

• 1% of your outstanding balance; or
• your monthly interest and fees; or
• £5

This means that with a balance of £3,000,  if you only made monthly minimum payments, you’d NEVER repay your debt. 1% of your outstanding balance would be £30 a month, but the monthly interest based on 23.7% APR would be £54 a month. Therefore, with the “minimum monthly payment plan”, you’ll have the same debt amount forever and you’ll end up paying interest at 23.7% APR. Not a good way to get rich!

Instead, make a plan. Create a detailed monthly budget using the free resource below to see how much money you can free up to start paying down your debt quicker:

Related Resource: Moneystepper Excel Budget (Free Download)

Note – this is our latest draft document for the 2016 savings challenge and is therefore still a work in progress. I will update this link each time a new version is released.

The quicker you can pay down those credit cards and high interest loans, the sooner you can start building real wealth and move down the path towards financial freedom.

In this same example of £3,000 debt, if you paid £100 a month off your credit card balance, you would pay it off completely in 44 months, making total repayments of £4,338.

However, if you were able to make a plan to repay £150 a month, then you would repay your debt in only 25 months, and reduce the total repayments to £3,746.

Whilst at first it seems that you are increasing your monthly payments, you have to remember that your monthly cost is the interest you are paying and not the total repayment.

In our two examples, in month 18 for example, you’d be paying £37.35 in interest when making £100 per month repayments, but you’d only be paying £19.77 in our second example when you make a higher monthly repayment of £150 per month.

ACTION POINT: CREATE A DETAILED BUDGET (USING THE FREE RESOURCE ABOVE) AND MAKE A DEFINED PLAN TO REPAY CREDIT CARDS AND HIGH INTEREST LOANS AS QUICKLY AS YOU POSSIBLY CAN.

 

#39 – Credit Cards & Loans – Use Credit Cards Responsibly

I made reference in tip #38 to “using credit cards responsibility”, but what do I mean by this? Well, the credit card can actually be a very useful weapon to have in your armoury when you are trying to battle towards financial freedom (too many metaphors?!).

In our article, the right way to use credit cards, we detail a four step guide to using credit cards responsibly:

1. Set up a direct debit to pay your card in full every month
2. Benefit from “deferred cashflow”
3. Use a rewards or cashback credit card (see tip #43)
4. Reap other benefits (inc. cheap emergency fund, fraud protection, improved credit rating, etc etc).

ACTION POINT: DON’T BE SCARED OF CREDIT CARDS! LEARN HOW TO USE THEM RESPONSIBLY AND YOU CAN ACTUALLY MAKE MONEY FROM USING CREDIT CARDS THE RIGHT WAY.

 

#40 – Credit Cards & Loans – Take Advantage Of 0% Balance Transfers (And Money Transfers)

In the current environment, 0% balance transfer (and money transfer) credit cards are simply the cheapest forms of loans available. A balance transfer card allows you to take out a new credit card with 0% interest over a set number of months to pay off an existing credit card balance from a different provider. These cards usually come with an associated upfront fee of between 1% and 5% depending on the card. A money transfer card works on the same principle, but allows you to transfer cash to your current account rather than just paying off another card.

For example, there is currently a card on the market which has a 2.99% fee for balance transfers (or 4% for money transfers) but has a 0% interest rate for 40 months.

Dividing the fee by the number of month, this means that the APR on the card is a minute 0.8% per annum for the balance transfer and only 1.2% for the money transfer.

This can be a hugely powerful tool in paying down your existing credit cards and high interest loans whilst incurring much lower interest payments. It is also appealing for anyone willing to “stooze” – a concept of borrowing at a very low rate and investing at a higher return – which is outlined in more detail in our article on how to manage 0% interest credit cards.

However, before taking out these credit cards, it’s absolutely essential that you create a realistic and detailed plan, as described in tip #38, for paying these debts down to zero before the 0% interest period ends.

ACTION POINT: CONSIDER 0% BALANCE TRANSFER AND MONEY TRANSFER CREDIT CARDS IN ORDER TO PAY DOWN YOUR CREDIT CARDS AND LOANS MORE QUICKLY. BY DOING SO, IF YOU PLAN CORRECTLY, YOU’LL INCUR MUCH LESS INTEREST.

 

#41 – Credit Cards & Loans – Pay Off Your Payday Loan NOW!

There are some pretty bad products available in the financial world. But, other than illegal products and outright scams, payday loans truly have to be the worst.

The government recently implemented a price cap on payday loans meaning that lenders could not set interest rates above 0.8%. This seems like a good idea, until you realise that this cap is 0.8% per day!!!

That means that the government (in order to protect the consumer) has capped the APR (the annual interest rate) at 1,270%.

So, you can save your money in the banks at 0.1% interest rates, but if you want to borrow, lenders can charge you 1,270%! Gross!

However, many people think that there isn’t any other way. They need the money quickly and think that payday lenders are the only solution. However, I’d argue that this may only be true for about 1% of people taking out these loans.

Instead, you should look at alternatives to payday loans, including (but not limited to):

• An agreed bank overdraft
• Pay advance at work
• The bank of Mum & Dad (or friends) – tip #42
• Peer-to-peer lending
• Credit unions

ACTION POINT: IF YOU HAVE A PAYDAY LOAN, DO EVERYTHING YOU CAN TO PAY IT BACK AS SOON AS POSSIBLE – IT’S KILLING YOU FINANCIALLY. IF YOU’RE THINKING ABOUT TAKING ONE OUT – DON’T! THERE ARE PLENTY OF ALTERNATIVES AVAILABLE THAT WILL BE MUCH, MUCH CHEAPER.

 

#42 – Credit Cards & Loans – Use The Bank Of Mum & Dad (Or Friends)

In the tip above on payday loans, we mentioned the so-called “Bank of Mum & Dad”.

If you are thinking about taking out debt with a bank, credit card, payday loan or anything else, there may be a much better option much closer to home.

For instance, you may have friends and family who are earning less than 1% on their savings. If you said to them that you need to borrow money in the short-term, but you would pay them 10% annual interest (or the equivalent), they would probably jump to lend you the money.

They are winning because they get a very good return on their money, and you win because you get to avoid payday loans and credit cards at higher interest rates, and you also can agree to these deals at very short notice if required.

However, I would encourage both parties to not think of it as “borrowing” from friends and family, but rather entering into a mutually beneficial financial business arrangement with them. To cement this, you should create a written agreement, which you both sign, which outlines how much you are borrowing, the agreed interest rates, and the agreed repayment schedule. This way, there can be no disagreements or falling out later down the line.

ACTION POINT: CONSIDER BORROWING FROM FRIENDS AND FAMILY RATHER THAN MORE EXPENSIVE LENDERS IF YOU CAN AGREE A MUTUALLY ACCEPTABLE INTEREST RATE FOR ALL PARTIES INVOLVED.

 

#43 – Credit Cards & Loans – Maximise Rewards & Cashback

As we mentioned in some of the tips above, one of the major benefits of using credit cards is the cashback and rewards that could be available. If you are able to pay down your balance in full every month, you could be earning up to 3% cashback or an equivalent through rewards.

For example, I outline in our article on the right way to use credit cards, how I earn the equivalent of 2.25% cashback through air miles on everything I spend on my Amex Avios Duo credit card.

Santander “123” credit card holders can earn up to 3% cashback at all major petrol station and on train travel (and 2% cashback at all major department stores).

The credit card which will be best for you personally will be dependent on how much you spend each month, and what you spend it on. However, as with you insurance, you can compare credit cards on confused.com.

Just head to the “rewards” section and you can find out which types of rewards and cashback cards are available and which may be best for you.

Remember to take into account any annual fees or charges on certain reward credit cards when trying to understand which will be best for you.

ACTION POINT: IF YOU PAY DOWN YOUR CREDIT CARD EVERY MONTH, THEN YOU COULD ACTUALLY BE MAKING MONEY EACH MONTH THROUGH CREDIT CARD CASHBACK AND REWARDS. SHOP AROUND FOR THE BEST DEAL FOR YOUR OWN PERSONAL SPENDING PROFILE.

Ways To Save Money On Household Bills – Gas & Electricity

Another area where Britons are generally paying too much is on their gas & electric bills. However, by following our 14 tips on how to find the cheapest energy provider, and how to reduce your energy usage, you can save a significant amount of money on your household bills.

 

#44 – Gas & Electric – Make Sure You’re With The Cheapest Provider

The first tip is similar to other tips we’ve come across in other categories. Whether it’s your bank account, your mobile phone provider, you insurer or whoever else, a huge percentage of Britons find themselves with bad deals, and paying well over the odds because they just stick with their current provider.

Part of the reason for this is that people think that it’s not worth the hassle to change.

Other people are simply too lazy to find out what else is out there. Well, our favourite comparison website, confused.com, allows you to compare all providers for your current usage to see how much you could be saving if you were with the cheapest provider.

Another service which also compares all UK suppliers to find your cheapest option is Energy Helpline, which takes your current usage and works out if you could save by moving to a cheaper provider.

As a test, I’ve gone to Confused and put in that I spend £40 per month on electricity and £30 per month on gas with the standard British Gas tariff. This estimates my annual spend at £840 per year.

However, a simple comparison shows that I could be saving over £200 per year by switching to GB Energy:

So, don’t be lazy, have a look to see how much you could be saving by moving away from the standard tariffs with the energy giants who are only focused on maximizing shareholder value rather than offering good value to their customers.

As an extra tip, see tip #109 and get cashback by using quidco.com where you can earn cashback when you change provider. In our example above, if you visit Confused via Quidco, you can earn an extra £24 when you perform a dual fuel switch.

ACTION POINT: PERFORM A COMPARISON TO WORK OUT HOW MUCH YOU COULD SAVE EVERY MONTH BY MOVING TO A NEW PROVIDER – YOU MAY BE SURPRISED AT JUST HOW MUCH YOU COULD BE SAVING.

 

#45 – Gas & Electric – Pay By Direct Debit & Get Paperless Bills

Almost all energy providers offer discounts for customers paying by direct debit. This seems like a win-win for me. The energy company finds it easier to manage the administration related to regular payments, and as the consumer you can just set up your direct debit and forget about it.

And these discounts can be pretty significant. For example, customers on the standard British Gas tariff receive a discount of 0.31p/kWh for gas and 0.93p/kWh for electricity. For the average customer, this will equate to over £40 per year for gas and over £30 per year for electricity.

So, if you are not already paying by direct debit, spending 15 minutes (or less) to set up your monthly direct debit should repay you over £70 a year (around £6 every single month!).

Equally, many of the cheapest providers will only allow you to obtain such a great rate if you agree to receive your bills and receipts online rather than through the post. Not only do you save on money, but you also save on paper. It’s always good to save the world, isn’t it?! J

ACTION POINT: IF YOU DON’T ALREADY PAY BY DIRECT DEBIT, SET IT UP! IF YOU DON’T ALREADY GET PAPERLESS BILLS, SET IT UP! YOU COULD SAVE HUNDREDS EVERY YEAR FOR DOING SO.

 

#46 – Gas & Electric – Install A Programmable Thermostat

It can often be the case that embracing technology allows you to reduce your household bills every month. We saw it with the driving apps for car insurance, and the new programmable thermostats can really help reduce your energy costs.

A programmable thermostat allows you to regulate the temperature in your property, and can be controlled from any location.

Say, for example, you are at work and you usually get home at 6pm. Therefore, your thermostat has been programmed to come on at 5.45pm so that your house isn’t an igloo when you step through the door.

But, today, your boss has asked you to work an extra few hours. No problem, you simply flick on your iPhone app and you can change your heating to come on at 7.45pm instead, thereby saving energy and money on your energy bill.

The most common thermostat of this type in the UK is the “Nest” learning thermostat:

 

ACTION POINT: CONSIDER REPLACING REGULAR BATHS FOR WATER SAVING SHOWERS IN ORDER TO SAVE HUNDREDS ON YOUR ANNUAL ENERGY BILLS.

 

#49 – Gas & Electric – Use Energy Saving Devices

There are a plethora of energy saving gadgets and devices available now which could help you reduce your energy usage, having a positive impact on both your household bills and on the wider environment.

Some ideas where you could save through energy saving devices are:

• Energy Monitors (under £30)
• Energy Saving Lightbulbs (under £4)
• Radiator Boosters (under £20)
• Computer Eco-Button (under £5)
• Vacuum Kettle (under £35)
• Automatic Radiator Bleeders (under £2)
• Ecoflap Letterbox Covers (under £25)
• Radiator Foil (under £6)
• Solar Chargers (around £20)

These will have varying impacts on your energy usage, but each should pay for themselves in a relatively short amount of time.

ACTION POINT: RESEARCH DIFFERENT TYPES OF ENERGY SAVING DEVICES TO REDUCE YOUR MONTHLY ENERGY USAGE AND THEREFORE SAVE MONEY ON HOUSEHOLD BILLS.

 

#50 – Gas & Electric – Lower The Temperature Of Your Hot Water

This is a remarkably easy tip for saving money on your household bills. What happens when you run your tap? Is the water too hot to touch? Do you ever need your water to be that hot?

The hot water heater is a major energy drain in most homes, accounting for about 14% of energy costs. For the majority of households, the water is kept hotter than most people ever need.

To keep the water at that heat in your home takes a lot of energy, which will cost a great deal of money.

ACTION POINT: GO TO YOUR BOILER AND REDUCE YOUR HOT WATER TEMPERATURE BY A COUPLE OF DEGREES. KEEP MOVING IT DOWN UNTIL YOU REALIZE THAT THE WATER ISN’T HOT ENOUGH FOR WHAT YOU NEED.

 

#51 – Gas & Electric – Stop That Heat Escaping

You spend a lot of money heating your home, but much of that heat could be escaping without you being able to feel the benefits. However, there are a number of ways that you can reduce how much energy escapes your home, and it doesn’t cost a bomb to put these in place:

• Loft insulation alone can save you up to £175 a year, according to the Energy Saving Trust, and this can be installed for free by either the government schemes, or through energy companies. British Gas, for example, is offering free insulation worth up to £1,000 to all households, regardless of their energy supplier. To qualify for this, you must apply before the end of November and your home must also meet certain requirements (e.g. having less than 60mm of loft insulation).
• Cavity wall insulation could add another £135 per year of savings in your energy costs.
• Also, some vulnerable people can take advantage of the Warm Front scheme, which pays a company to improve insulation on your loft, cavity walls and hot-water tank. To qualify, you must receive Pension Credit with your state pension, have an income below £15,860 and receive Child Tax Credit or Working Tax credits, or claim income support.

Even if you can’t get this insulation for free, it may be worthwhile improving the insulation in your property to reduce your bills. You can also take more obvious steps, like closing windows and doors to stop heat escaping from rooms that you are trying to keep warm.

ACTION POINT: HAVE A LOOK AT THE GOVERNMENT SCHEMES TO SEE IF YOU COULD BENEFIT FROM FREE INSULATION FOR YOUR LOFT OR WALLS. EVEN IF YOU CAN’T, IT MAY BE WORTH INVESTING IN THIS TO REDUCE YOUR WASTED ENERGY AND RELATED COSTS.

 

#52 – Gas & Electric – But, Don’t Trap That Heat In

On the other hand, you shouldn’t be trapping that heat in on your radiators, as it can be extremely inefficient. By placing items, such as clothing, on your radiators, you are effectively doing the same thing as when you insulate your loft and walls.

However, the problem here is that you are keeping the heat within the clothes and hence you have to use a lot more energy in order to heat the room.

Instead, you should be trying to circulate the warm air as efficiently as possible, which you can do with radiator boosters, which are effectively a fan which pushes the air from behind your radiator around the rest of your room:

Also, drying clothes on radiators is not recommended as it can lead to damp and rot in the room in which you are drying the clothes.

ACTION POINT: DON’T DRY CLOTHES ON YOUR RADIATORS AND PROMOTE CIRCULATION OF HOT AIR IN YOUR ROOMS WITH A RADIATOR BOOSTER.

 

#53 – Gas & Electric – Put Some Clothes On

This is advice straight from your grandma: “You’re cold? Then put on a jumper”. And, if you are looking to save money on household bills, clearly she is right. Instead of putting on the heating, just pop on another pair of socks if your feet are cold, or put on a thick jumper or cardigan.

Whilst I don’t recommend that you risk hyperthermia by not putting the heating on, in spring and autumn months, you can save a lot of energy, and money, by avoiding putting the heating on and simply popping on a couple of extra layers.

ACTION POINT: DON’T PUT THE HEATING ON – STICK ON A SWEATER!!

 

#54 – Gas & Electric – Submit Your Meter Readings

Another sneaky tip of those blasted energy companies is that they will hold onto your cash. Generally when you start with a new energy provider, they will estimate your usage and set up a direct debit for you to pay every month.

Then, if your actual usage is higher, they will contact you to increase your direct debit to ensure that your account is always in credit.

However, they are much less likely to contact you if you are paying too much. They will just let the credit (the difference between what you’ve been charged and what you’ve paid) sit in your account.

Obviously this money isn’t earning you any interest while it is sitting in the energy providers account, but instead is actually is earning the energy company interest!

So, submit your meter readings on a regular basis and flex your direct debits to make sure that you aren’t making large overpayments and not putting your money to good use.

This is even more important if you are in credit card debt for example. Having £200 sitting in your energy suppliers’ account due to overpayments you have made on your direct debits is even more painful when you are paying high interest on debs elsewhere.

ACTION POINT: CHECK YOUR ACCOUNT ONLINE TO SEE IF YOU HAVE A LARGE CREDIT BALANCE. IF THIS IS THE CASE, CONTACT YOUR SUPPLIER TO REDUCE YOUR MONTHLY DIRECT DEBITS AND GET A REFUND ON YOUR BALANCE.

 

#55 – Gas & Electric – Replace Your Boiler

All of the tips so far have been how to reduce the amount of energy you use, and thereby saving money on household bills as a by-product. However, all your efforts to save energy may be in vain if you still have an energy inefficient boiler.

It is estimated that boilers account for over 55% of what you spend in a year on energy bills. The average energy bill in the UK in 2014 was £1,265 per year.

So, that means that around £700 per year, or nearly £60 per month, comes from your boiler. The Energy Saving Trust also estimate that replacing a “G-rated” boiler with an “A-rated” could lead to savings of up to £340 every year.

The problem is that these savings do not come cheap. One of the cheapest and most common boilers of this type, the Valliant Eco TEC Pro, costs £1,100.

Therefore, you basically need to work out the payback period on getting a new boiler, and if your savings each month will justify getting a new boiler.

It is also worthwhile checking out the government ECO scheme, which qualifies home owners to have their old inefficient boilers replaced completely free of charge. However, the criteria are quite strict and so this won’t apply for many people.

ACTION POINT: DETERMINE YOUR ESTIMATED ANNUAL SAVING OF YOUR CURRENT BOILER AND AN A-RATED FUEL EFFICIENT BOILER. THEN, COMPARE THIS TO THE COST OF BOILER INSTALLATION TO SEE IF IT IS WORTHWHILE.

 

#56 – Gas & Electric – Consider Solar Panels

This may seem like a fairly drastic way to save money on your household bills, and to be honest it is. In fact, it is more akin to an investment. However, with “fixed” returns of up to 10% per year depending on your usage and installation, it is an option which is appealing to many households.

I won’t go into any great detail here, but highly recommend that you read more in our detailed article below if you are interested:

Related Article: What Are The Returns on Solar Panels UK? (Moneystepper)

ACTION POINT: READ OUR DETAILED GUIDE ON SOLAR PANELS TO DETERMINE YOUR ESTIMATED RETURN ON INVESTMENT (ROI) FOR INSTALLATION. WITH SOME PEOPLE NOTING AN ANNUAL FIXED ROI OF UP TO 15%, THIS CAN BE A GREAT OPTION FOR MANY.

 

#57 – Water – Consider Installing A Water Meter

This is a tip that hugely divides people. That is because for some, installing a water meter can indeed save them money every month, but for others it will lead to higher bills.

Effectively, if you are currently not on a water meter, you need to try to estimate whether you are using less water than you are being charged for.

Standard water billing works on “average usage” for your area, and hence you personally may be using less than that. If that is the case, having a water meter installed could end up saving you money.

The problem is, without having a water meter, it is very difficult to estimate how much water you are using. For most people, the following rule of thumb will best determine whether a water meter will be right for you:

“As a rough rule of thumb, a water meter will save you money if there are more bedrooms than people in your household.”

However, this is incredibly general. So, have a think about what the “average” person uses, and what you use. If you think that you are under the average, then go ahead and get one installed.

Luckily your decision (at the time of writing) is not final. If you choose to switch to a water meter, you will have a trial period of 12 months, during which time you’ll be given the option to switch back to your old charges.

However, in certain areas of England, metering is becoming compulsory and hence you won’t have such freedoms.

ACTION POINT: IF YOU BELIEVE YOU USE LESS THAN THE AVERAGE AMOUNT OF WATER, YOU CAN HAVE A METER INSTALLED ON A 12-MONTH TRIAL. IF IT ENDS UP COSTING YOU MORE, YOU CAN REVERT BACK TO YOUR OLD CHARGES (T&Cs APPLY).

 

Ways To Save Money On Household Bills – Mobile Phones

As mobile phones (mainly thanks to Apple) have become an increasingly important part of our lives, maintaining a mobile phone (especially a smart phone) has become ever more expensive. Often the price of the phone is wrapped into the contract, on which you can end up paying lots of interest without even knowing, and hidden charges for data and calls abroad can soon add up.

Therefore, follow these 7 tips to keep the cost of that smart phone as low as you possibly can in order to save money on your overall household bills.

 

#58 – Mobile Phone – Opt For SIM Only Deals

Recently, a listener to the Moneystepper Q&A Podcast posed a question related to obtaining an upgrade on her existing contract compared to a SIM only option. You can read the full show notes by following that link, but the crux of the answer was that she could save over £400 over the course of two years by going with a SIM only deal rather than her contract.

The basis of the SIM only plan is:

1. Buy your phone (either new or second hand) upfront from the cheapest provider possible (I personally got mine from Amazon)
2. Get a SIM only deal whereby you pay a certain amount each month for a goodybag of usage. The price and contents vary, but the example we use is with giffgaff where you can get 500 minutes, unlimited texts and 1GB of 4G data for only £12 a month
3. Change your goodybag each month depending on whether or not you exceeded your usage.

Not only can this save you hundreds of pounds, but you’ll also be able to avoid being locked into lengthy contracts.

If you sign up to giffgaff using the banner below, you’ll earn £5 free credit when you order your SIM. Win-win!

ACTION POINT: SEE HOW MUCH YOU COULD SAVE BY COMPARING SIM ONLY OPTIONS AGAINST YOUR CURRENT CONTRACT. IF YOU WISH, WE OFFER A £5 FREE CREDIT WHEN YOU ORDER YOUR FREE SIM WITH GIFFGAFF WITH NO OBLIGATION OR CONTRACTS.

 

#59 – Mobile Phone – Buy Second Hand / Reconditioned

As we discussed in tip #58 above, you are much better off buying your mobile phone upfront rather than through acontract.

Moreover, I personally am of the opinion (just like for cars in tip #18) you should opt to buy a second hand phone rather than a brand new one.

For instance, a new Apple iPhone 16GB 5s currently costs £299 on Amazon. However, you can get a “like new” condition second hand phone from the same site for only £205.

I personally did this with my last phone, and it was just that: like new. I couldn’t see any difference between what I received in the post and a brand new phone. Equally, there was no difference in the returns policy.

The only difference was the price tag, where I got the same functionality for £94 cheaper in this case, which is a whopping 32%.

In this world of consumerism, we have a horrible tendency to buy and throw away. This is not great for the environment that we live in, and moreover it’s not great for our bank balance.

ACTION POINT: WHEN BUYING A NEW PHONE, AS LONG AS THE RETURNS POLICIES ARE IN PLACE, DON’T BE AFRAID TO GO SECOND HAND TO SAVE A SIGNIFICANT AMOUNT COMPARED TO BUYING BRAND NEW.

 

#60 – Mobile Phone – Only Pay For What You Use

This seems like a really obvious thing to say, but millions of people fall foul of this every month in the UK. If we needed milk for a round of teas, we’d buy one pint. We wouldn’t buy the six pint bottle and pour the rest away.

However, this is exactly what millions of people are doing with their phone contracts. We have already recommended that you go for SIM only when you choose your mobile phone. Within this, there are different levels of monthly goodybags that you can choose from, ranging from £5 per month (for 100 minutes, 300 texts and 100mb of data) to £20 per month for unlimited amounts of all three.

Many people opt for the most expensive for “freedom”. However, with many people now using facetime and skype for free video calls, and whatsapp and similar services for messaging, if you are careful with your data usage, the £5 per month option would be sufficient for many people.

Given that this package has unlimited free minutes to other giffgaff users, if you and the people you speak to most frequently all get this deal then I’d be surprised if you used more than 100 minutes per month.

And, regarding the data, I actually turn off my data when I’m away from wifi unless I need it for something specific (like finding a building, or checking if someone has sent me a whatsapp if I’m meeting them). Using this kind of “data diet”, 100mb should be enough to get you through the month.

If it’s not, you can move up to the next level: £7.50 for 250 UK minutes, unlimited texts and 500MB of UK data.

ACTION POINT: TAKE THE GIFFGAFF CHALLENGE! WITH A LITTLE PLANNING, I THINK THAT MOST PEOPLE COULD SURVVIVE ON THE £5 PER MONTH PACKAGE. WHEN YOU COMPARE THAT TO YOUR CURRENT CONTRACT, YOU COULD BE SAVING UPWARDS OF £30 EVERY MONTH.

 

#61 – Mobile Phone – Look Out For Free Wi-Fi

As mentioned above, you can drastically reduce the amount of data that you use by making sure that you turn your data off when you are away from wi-fi, and that you only turn on data when you need it. The good news is that in 2015, free wi-fi is everywhere.

In fact, in a city centre, you’ll find it hard to identify areas where you are more than a couple of minutes away from free wi-fi. You’ll find them in pubs, cafés, restaurants, shops, train stations, libraries, all over the place. In some cities, they’ve even started to install “citywide wi-fi” where you can simply log onto the free wifi from anywhere.

It’s important to be safe and aware of cyber hacking (so avoid using online banking and making purchases on shared wi-fi to be safe), and you’ll often have to provide details to get access. However, setting up a separate free email account just for this is an easy way to avoid the associated marketing.

By always using this free wi-fi, and turning off your 3G or 4G data while you are out and about, you’ll see your data usage fall dramatically and you’ll be much more likely to be able to live off the £5 per month deals we recommend in tip #60.

ACTION POINT: TAKE ADVANTAGE OF FREE WI-FI RATHER THAN GOBBLING UP YOUR DATA ALLOWANCE. SET UP A “FAKE EMAIL” FOR THIS TO AVOID EMAIL MARKETING SPAM IN YOUR MAIN INBOX.

 

#62 – Mobile Phone – Use Services Like WhatsApp & Facetime & Skype

So, that is your data allowance reduced, but how can you use less calls and text messages.

Well, as long as you are making calls when connected to wi-fi, you can use Facetime or Skype to contact other smartphone users for free.

Otherwise, you can check your home phone deal to see if you have periods of free calls to avoid using up your minutes allowance.

Also, remember that on our recommended giffgaff deals, you get unlimited calls to other people on the giffgaff network – so make sure your husband, wife, girlfriend, children, parents and best mates are all on the same deal!

For text messages, you can use WhatsApp messaging (or even messaging through Facebook) whilst you are connected to wi-fi in order to maintain your allowance if you don’t have unlimited messages in your deal.

ACTION POINT: MINIMISE YOUR CALL AND TEXT MESSAGE USAGE BY TAKING ADVANTAGE OF FREE SERVICES LIKE FACETIME AND WHATSAPP WHILST YOU ARE CONNECTED TO WI-FI.

 

#63 – Mobile Phone – Plan Your Trips Abroad

Although it is slowly getting better as European Regulation is enforced against phone contract providers, using your mobile phone abroad can still be pretty expensive. For example, the standard O2 rates are currently:

• 5p per minute for calls to landlines or mobiles
• 3p per minute to receive calls
• 8p to send a text message
• 2p / MB of data

Whilst these aren’t horrendous compared to what they have been in the past, connecting to data for a few hours and making a few lengthy phone calls can soon see that bill spiral.

The solution? The same as for when you are at home. Turn off your data unless you’re connected to free wi-fi, and make calls and texts through Facetime and WhatsApp.

If you absolutely must use your data whilst you are out and about, then you can plan for this by buying “bundles” in advance for heavy usage. If you are just loading tripadvisor to find a good restaurant, then turn all other data usage off other than that specific app or browser, and only look at what you need.

ACTION POINT: PLAN AHEAD TO MINIMISE THE COST OF CALLS AND DATA WHILST YOU ARE ABROAD. IDEALLY, AVOID USING YOUR PHONE AT ALL OUTSIDE OF FREE WI-FI AREAS.

 

#64 – Mobile Phone – Be Wary Of Insurance

We have covered this in the insurance section above, but it’s definitely worth reiterating here. In my opinion, not one single person in the UK should have mobile phone insurance.

Remember the rules:

• if you can afford to replace it, then you don’t need insurance
• if you can’t afford to replace it, then you shouldn’t be buying it and you should be opting for a cheaper phone.

Many insurance policies on mobile phones can cost so much in premiums that the cost of the insurance can exceed the cost of the new phone within 2-3 years. On top of that, there are many exemptions that exist which mean that even if you did make a claim, you are not guaranteed to get a payout.

Mobile phone insurance is one of the most profitable products for insurance companies, and therefore one of the worst products for you.

ACTION POINT: NEVER TAKE OUT MOBILE PHONE INSURANCE. IF YOU CAN AFFORD TO REPLACE IT, YOU DON’T NEED INSURANCE. IF YOU CAN’T, THEN BUY A CHEAPER PHONE!

 

Ways To Save Money On Household Bills – Home Phone, Broadband & TV

Right then – next up in the ways to save money on household bills is your home phone, broadband and TV. I’ve grouped these all together as they are often provided by the same companies and can all be negotiated together.

Once again, you may not like these “cutbacks”, but if you are looking to save money on your household bills, then implementing both of these tips will help you achieve that.

 

#65 – Home Phone & Broadband – Shop Around

You guessed it. The first tip is to shop around, using comparison websites.

A quick search on the always useful confused.com shows many offers which could appeal to you and save you lots compared to your current deals. However, make sure that you include line rental into your search.

For example, you can get 2 years of home phone and broadband for FREE with SSE. However, line rental is £12 per month, so amounts to £144 per year.

Alternatively, you could go with Sky Broadband, which has free broadband for one year, then £16.40/month line rental, but you get £100 cashback from the provider, equaling only £96.80 for the year. However, the 2^nd year would be more expensive and you don’t get any calls included.

You’re going to have to do a little bit of comparison work for your own situation, but it will definitely be worth it to save money on one of the biggest household bills!

ACTION POINT: NEVER RENEW WITH YOUR CURRENT PROVIDER. AS LONG AS YOU ARE NOT LOCKED INTO A CONTRACT, YOU CAN ALMOST ALWAYS SAVE MONEY ON YOUR INTERNET AND HOME PHONE PACKAGE. GET COMPARING TODAY!!

 

#66 – TV – Do You Really Need It?

My question to you is: do you really need a TV?

When I was at school, people without televisions used to get bullied. That is a horribly sad state of affairs when you think about it. I feel that there is almost no value to TV at the current time. If there are specific programs you want to watch, you can watch these for free online using catchup services like iplayer, as you only need a TV license to watch live TV.

If you really want to see a live event (for me, it’s usually sport), then a trip to the pub and one pint of beer whilst watching it with friends is not only more enjoyable, but cheaper as well (as long as you don’t go crazy on the booze!).

The things that annoy me most about TV are:

1. People watching TV programs based on people watching TV programs (Gogglebox)
2. People watching TV programs about made up people leading mundane lives (Soaps)
3. People watching TV programs about people who have talents. Stop it, and learn a talent.
4. People watching TV programs about people who do things. Stop it, and do the damn thing!

The only thing I can really justify on TV is the education that can be sought from certain TV programs (documentaries, etc), but then there’s probably better (and cheaper) ways of learning that as well.

So, ask yourself if you really need your TV at all. If not, as long as you never watch live TV, you could save £145.50 per year, or over £12 per month by not paying for a TV license.

This is what I’ve done. There is no way that I get £12 of value from my TV each month – not even close. Therefore, this could be a very easy way to slash your household bill.

Another win – I don’t have an actual TV anymore – which means I’m not tempted to waste hundreds of pounds on a new flat screen plasma TV just to keep up with the Joneses.

ACTION POINT: ASK YOURSELF – DO YOU REALLY NEED TV? IF SO, WHAT’S IT WORTH TO YOU? EVEN IF YOU DO NEED BASIC TV, CAN YOU REALLY JUSTIFY PAYING UPWARDS OF £60 A MONTH FOR SKY TV. I THINK IT’S DIFFICULT FOR ANYONE TRYING TO SAVE MONEY ON HOUSEHOLD BILLS TO JUSTIFY THAT. MORE EXTREME, I WOULD QUESTION YOURSELF WHETHER IT’S WORTH PAYING £12 PER MONTH ON YOUR TV LICENSE. FOR ME, IT DEFINITELY WASN’T!

Ways To Save Money On Household Bills – Groceries

The next item on the list of household bills is groceries. How much you cut back here will depend on how much you are currently spending and how “frugal” you are willing to be with your expenditure. That said, I estimate that with a little careful planning, and very little change to the food you eat, the average household could cut their grocery costs by up to 50% every month. Try these 13 tips to see how much you can save.

 

#67 – Groceries – Use Discount Supermarkets

Our first tip for saving money on groceries is to embrace the so-called discount supermarkets. For years, the “big 4” supermarkets (Tesco, Asda, Sainsburys and Morrisons) dominated in the UK, but luckily for the consumer looking to save money, this has been shaken up in the past few years by the entrance of the so-called “discounters” into the market. Whilst these are still the biggest four supermarkets, many people have been swapping the usual suspects for the likes of Aldi and Lidl.

In November 2014, I took the test myself to answer “Are Discount Supermarkets Actually Cheaper?”. In this article, I did my full weekly shop at Aldi and then compared the prices to each of the four main supermarkets. The results were surprising to me:

• My weekly shop was a whopping 26% cheaper at Aldi compared to the average of the other big 4 supermarkets.
• Out of 53 products in my basket, only 8 could be found cheaper elsewhere.
• The second cheapest supermarket was Asda, but this was still 19% more expensive than Aldi

However, whilst I was surprised with just HOW cheap it was compared to its rivals, I was even more surprised by the quality. I expected to get poorer quality items than at the standard supermarkets, but in fact the opposite seemed to be true – I would argue that the majority of the things I bought (especially the fruit and vegetables) were actually better quality.

A final plus for the discounters is that you can often get smaller portions of products. For instance, carrots come in 500g bags, where you have to buy 1kg at the major four supermarkets. This helps a lot with tip #71 below.

ACTION POINT: FOR YOUR NEXT “BIG SHOP” HEAD TO ONE OF THE DISCOUNT SUPERMARKETS. THEY ARE MUCH, MUCH CHEAPER AND SO YOU COULD END UP KNOCKING 20-30% OFF YOUR GROCERY SHOPPING BILLS TO HELP TO CONTRIBUTE TO SAVING MONEY ON YOUR OVERALL HOUSEHOLD BILLS.

 

#68 – Groceries – Don’t Be Fooled By Loyalty Cards

Some people argue that the main supermarkets are still cheaper than the discounters because of loyalty cards. Sorry to put it harshly, but these people are wrong. The loyalty discount is built into their business models. If they need to make a 10% margin on a product costing £1, they don’t set the price at £1.10 and then offer 1% off through a discount scheme and wonder why they only made a 9% profit.

The data and information that goes into these schemes is mind-boggling and I can assure you that you are not “beating the system” by collecting these loyalty points. Granted, you are doing better than if you shopped at the same supermarkets without having the loyalty card, but that doesn’t make it better than the discounters on overall price, just because the discounters don’t run loyalty schemes.

ACTION POINT: DON’T BE FOOLED INTO SHOPPING AT A SUPERMARKET BECAUSE OF THEIR LOYALTY PROGRAMS. THE ONLY PERSON WINING BECAUSE OF YOUR LOYALTY IS THE SUPERMARKET THAT YOU ARE LOYAL TO!

 

#69 – Groceries – Shop At Local Markets

I’m a huge advocate of local markets, especially for fresh produce (meat, fish, fruit and vegetables). You can buy from local businesses (it’s always good to shop local) and most importantly for this post, you can find that many products are MILES cheaper.

I could list a million examples, but in the center of my hometown of Newcastle is The Grainger Market. It’s not uncommon to find deals on fruit and vegetables, especially those in season, where the prices can be 70-80% less than the supermarkets.

Last week for instance, I picked up 12 bananas for 30p, 3 punnets of strawberries for £1 and 2 punnets of grapes for £1. The equivalent prices in the supermarket directly opposite would be around £1.50 for that many bananas, £6 for the same amount of strawberries and £4 for the grapes.

Equally, you can get 5 kilo of fresh chicken breast for £18. In Tesco, you can get 5kg of frozen chicken breasts for £20. The difference is that the Tesco option is “chicken breast fillets with added water, dextrose and salt”, so that they only actually contain 80% chicken.

The downside for the market produce is that the produce is often fresh and not pumped with pesticides (if you can call that a downside) and hence may only last for one or two days compared to the longer life supermarket produce.

But, as long as you buy with a plan (see tip #70), you can avoid waste and greatly reduce your grocery costs.

ACTION POINT: VISIT YOUR TOWN OR CITY’S LOCAL MARKETS AND TRY SOME OF THEIR PRODUCE. YOU’LL FIND YOU CAN GET THE SAME OR BETTER QUALITY FOR A MUCH LOWER PRICE (ESPECIALLY ON ITEMS “ON OFFER”).

 

#70 – Groceries – Plan Your Meals (Including Packed Lunches)

This is a big saver, in terms of both money and time. Before the start of the week, fire up a spreadsheet and plan the meals that you will have every day during that week. Then, based on what you are cooking, go and buy only the required ingredients. The benefits you will see will be monumental:

• Waste = wasted money – buy only buying items you need, you will make sure that you aren’t wasting any food and therefore not wasting any money
• Health – by planning your meals, you can make sure that you are eating healthily at every meal. If you think about it, you will probably reduce your household expenses further down the line when you avoid Type II Diabetes or heart disease!!
• Time – you can cook everything in bulk on Sunday night and freeze it as appropriate. This will save you time each evening cooking from scratch. Time that you can spend doing things that you enjoy (or earning even more money!!!).

It might sound a bit twee, but just try it for one week and you’ll really notice the pounds dropping off your body and straight into your pocket!!

ACTION POINT: PLAN YOUR MEALS FOR THE NEXT WEEK. BUY YOUR WEEKLY SHOP ACCORDING TO THIS PLAN AND MAKE ALL YOUR MEALS UPFRONT TO SAVE TIME.

 

#71 – Groceries – Never Throw Away Good Food

Throwing away good food is an absolute crime, both financially and when you consider all the starving children in the world (quite a dramatic, clichéd statement – but unfortunately it’s still true).

You can implement tips #69 and #70 to better plan your meals and reduce the likelihood of throwing away food, but even then some might get through the net.

You’ll get better at this over time if you monitor what you waste. For example, I almost always wasted fresh green beans. I would buy the standard sized packet from the market, use one or two portions and the remainder always got thrown away.

So, I found a solution of buying frozen green beans which would mean that I could use what I needed and the rest would last until the week after.

ACTION POINT: I SET YOU THE NO-WASTE CHALLENGE – TRY TO GO FOR THE ENTIRE WEEK (OR BETTER STILL THE ENTIRE MONTH) WITHOUT THROWING ANY FOOD IN THE BIN OR DOWN THE SINK. ANY FOOD YOU DO, NOTE IT DOWN SO THAT YOU CAN AVOID WASTING IT NEXT TIME.

 

#72 – Groceries – Take The “No Brand” Challenge

Another challenge. Next time you go shopping, for one week only, you are not allowed to buy anything branded (unless there is a significant health reason for doing so). Then, right down all the things you have bought where you would usually opt for the brand. Where possible, do a blind taste test. This might sound stupid, but it’s actually pretty fun.

So, say you always buy Heinz beans. Well, next time you go shopping buy some non-branded beans as well. Then, cook half a tin of both and test yourself and your family to see which one they prefer. Unless you have a strong preference for the one that turns out to be the branded product, go non-branded the next time you shop.

I did this about a year ago and I couldn’t tell the difference on anything at all! This might be because I have useless taste buds, but is more likely because a lot of the stuff is the same. For example, there were reports in the news that Tesco beans and Tesco Value beans were actually the same beans, and the only difference was the branding, advertising, etc. I’m not sure how much truth there is to that, but very often the difference in taste between branded and non-branded products is negligible.

ACTION POINT: TAKE THE NO-BRAND CHALLENGE WHERE YOU AND YOUR FAMILY PERFORM A BLIND TASTE TEST (MAKE SURE ITS BLIND) ON BRANDED VS NON-BRANDED. THEN, IN THE FUTURE, ONLY EVER GO BRANDED WHERE YOU ALL HAD A VERY STRONG PREFERENCE FOR THE BRANDED GOODS.

 

#73 – Groceries – Stick To The Shopping List

Once you’ve planned out your meals (tip #70), and you know where you are buying branded vs non-branded (tip #72), the next task is to buy everything on your shopping list and nothing else. Many people find the temptation of special offers or nice looking treats too much when they hit the supermarket and hence shop online to avoid unnecessary purchases.

I would recommend that, but also that you can make a game out of it. “Welcome contestant X. It’s a test of your will power, but can you complete the shopping list challenge?!”

Most people are especially distracted by “too good to miss offers” in the reduced section, or by goodies in the bakery or sweets aisles. Yes, £3 down to £1.20 is a good offer for that Belgian chocolate cheesecake, but that’s still £1.20 more than you planned and wanted to spend, and a whole lot more calories, sugar and fat than you wanted. I know, bah humbug, but you asked me for ways to reduce your household bills, not ways to get fatter at a discount!!

ACTION POINT: ONCE YOU’VE MADE YOUR MEAL PLAN, WRITE YOUR SHOPPING LIST AND STICK RELIGIOUSLY TO IT. AVOID LOOKING AT THE ENDS OF THE AISLES (THE SPECIAL OFFERS) AND ANYTHING IN THE REDUCED OR BAKERY SECTIONS!

 

#74 – Groceries – Never Shop When Hungry

Which brings us onto one of the best known tips in grocery shopping – NEVER shop when you are hungry. These deals can be difficult to avoid anyway, but if you haven’t had your dinner and you see a discounted snack with a yellow sticker on, no man or women I know has the willpower to overcome that type of temptation!

Therefore, if you are visiting the supermarket, make completing tip #73 much easier by doing so on a full stomach.

ACTION POINT: MAKE SURE YOU’VE HAD A GOOD MEAL (OR AT LEAST A HEARTY PLANNED SNACK) BEFORE HEADING TO THE SUPERMARKET!

 

#75 – Groceries – Stop With The Excuses

This tip is more diet related than related to money saving, but does have a money saving aspect.

It is not cheaper to buy fast food than to make it yourself. It’s just not. This is what you tell yourself so you can eat fatty, sugary, convenient crap. Stop it!

You don’t believe me? I’ve done a full study on it here. Basically, I was able to show that over a week, healthy food is up to 30% cheaper than eating unhealthy food if well planned.

But, what is the trick? Avoiding “health foods”. There is a big difference between foods that are healthy (fruit, veg, lean meat, fish, etc) and foods that are packaged as “health foods”, which are actually usually not that healthy for you at all. Common examples include expensive cereals and cereal bars, smoothies and pre-packages salads.

Another thing to consider is the health costs that come into play later on. Granted those are a lot harder to put onto a spreadsheet. I think we can agree though that someone who eats like crap is going to have more expensive medical bills later in life than someone who spent more (because of lack of planning) to eat healthy. Remember: “You can pay the farmer now, or you can pay the doctor later”.

ACTION POINT: FOR THE BENEFIT OF YOUR HEALTH AND YOUR WEALTH, STOP BUYING CRAP FOOD BECAUSE IT’S “CHEAPER” AND STOP BUYING “HEALTH FOODS” WHICH ARE CONVENIENT BUT ACTUALLY NOT ANY HEALTHIER THAN MOST OF THE CHEAP CRAP!

 

#76 – Groceries – Never Buy Bottled Water

This should be obvious for people that are looking to cut down on their household bills, but buying bottled water is just a waste. Yes, I understand that you need to drink a lot of water every day to stay hydrated and healthy.

However, the vast majority of people fail to identify bottled water over tap water (and almost all fail to identify bottled water over filtered tap water).

So, drink tap water and if you need it on the go, then buy one bottle and just refill this will tap water when you need to. The cost of bottled water can really add up over time and, excuse the pun, but it’s genuinely just money down the drain!

ACTION POINT: DRINK TAP WATER INSTEAD OF BOTTLED WATER. SIMPLES.

 

#77 – Groceries – Couponing Isn’t Dead

Whilst not quite a big of a phenomenon here in the UK as it is in the US, it doesn’t mean that you can’t save money on your groceries by taking advantage of coupons. You can find these online, in magazines, newspapers and via many other sources.

In fact, there are many sites online that keep up to date lists of supermarket coupons that you can download and print off completely free of charge. For example, here is the list of coupons from Moneysaving Expert.

However, just like with the loyalty cards, don’t get sucked in here. If you don’t usually buy a certain product at all, then don’t start buying it just because there’s a good deal with a coupon. Equally, don’t buy a product for £2.99 where you have a £1 off coupon if you usually buy a cheaper version of the same product for £1.25!

ACTION POINT: KEEP YOUR EYES OPEN AND SEARCH ONLINE FOR COUPONS ON PRODUCTS THAT YOU USUALLY BUY. YOU’LL FIND THAT COUPONS ARE GENERALLY AVAILABLE ON EXPENSIVE BRANDED PRODUCTS, BUT OCCASIONALLY YOU’LL FIND A GEM ON A PRODUCT YOU BUY WHICH WILL HELP REDUCE THE COST OF YOUR WEEKLY SHOP.

 

#78 – Groceries – Don’t Get Sucked In By Special Offers

We’ve alluded to this above, but when it comes to grocery shopping, avoid getting sucked in by special offers. There are two reasons to avoid special offers.

The first is when you have an offer like £1.59 each or two for £3 and you only need one. You have to remember that the second item isn’t saving you 9p or 18p, but it’s costing you £1.41. If you don’t need the second item, it’s £1.41 more than you need to spend. This is taken to the extreme in these hilarious “supermarket offers”.

The second is when you end up buying something that you wouldn’t usually buy just because it’s on special offer. Special offer or not, if you didn’t need it, it’s wasted money.

ACTION POINT: ONLY GO FOR SPECIAL OFFERS ON PRODUCTS YOU WOULD BE BUYING ANYWAY, AND WHERE YOU NEED THE QUANTITY THAT IS ON OFFER.

 

#79 – Groceries – Start A Garden

Our last way to save money on groceries is to avoid the supermarket altogether, and growing your own food. This can not only guarantee the source of your fruit and veg, but for a little effort, you can make your own produce for cheaper than the supermarkets.

This website estimates that to make a can of diced tomatoes costs her around 2¢ per ounce compared to 9¢ per ounce at the store. This 78% reduction is clearly substantial in % terms, but I would urge caution here – when you take hourly value into account (the amount of time you have to expend to make the tomatoes) the supermarket (or more specifically the local market) may be a better option.

Whilst they make a profit on their sales, which clearly makes it more expensive, they also get to benefit from economies of scale that you don’t.

For more information, I would recommend the Frugal sub-reddit, who often have discussion on what fruit, vegetables and herbs are actually worth the time/money to grow yourself.

ACTION POINT: CONSIDER GROWING YOUR OWN FRESH PRODUCE. HOWEVER, CAREFULLY THINK ABOUT THE TIME ELEMENT AND ALL THE HIDDEN COSTS BEFORE TRYING TO SAVE MONEY IN THIS WAY.

 

Ways To Save Money On Household Bills – Subscriptions

Subscriptions tend to be a luxury. And as for all luxuries you should be asking yourself…

 

#80 – Subscriptions – Do I Need It? Do I REALLY Want It?

Whether your subscription is for magazines, newspapers, snack boxes, Netflix, or anything else, you will find that the answer to the first question is probably no – you don’t need it.

The second question will be harder to answer, and will largely come down to how much desire you have to reduce those monthly expenses and save money on household bills.

My suggestion would be (unless there is a large fee for doing so) to cancel your subscription. If you find in 2-3 months that your life is a worse place without it, then you can always take it back up if you can afford it.

However, many subscriptions are either due to habit, or simply because you signed up a while ago and you’ve never got round to cancelling.

ACTION POINT: CANCEL ALL OF YOUR SUBSCRIPTIONS TO PRODUCTS AND SERVICES TO SLASH YOUR HOUSEHOLD BILLS. IF YOU CAN’T LIVE WITHOUT ONE OF THEM, YOU CAN ALWAYS RE-SUBSCRIBE AT A LATER DATE.

 

#81 – Subscriptions – Stop Paying For Gym Luxury

One common subscription people have is for their gym. Now, I’m not going to tell you to go and cancel it, because I have a gym subscription and that would be hypocritical!

However, what I would say is that your gym should be functional, not a luxury. You shouldn’t be spending £75 a month on your gym membership because the towels smell nice or the coffee is good.

You should find a cheap gym with the equipment that you need to support your workout and go there. Mine, for example, has everything that I need and much more, and is only £14.99 per month.

That said, if you do need to cut your monthly expenses further, then any gym memberships that aren’t used regularly should go, and if you really need to cut back, then you may find that you can replace much of your exercise with free outdoor activity.

ACTION POINT: AVOID “LUXURY” GYMS – YOU SHOULDN’T BE PAYING MORE THAN £25 A MONTH MAXIMUM. IF YOU DON’T USE YOUR GYM MEMBERSHIP, OR YOU THINK YOU COULD REPLACE IT WITH FREE ALTERNATIVES, THEN CANCEL IT TO SAVE MONEY IN YOUR MONTHLY BUDGET.

 

 

Ways To Save Money On Household Bills – Clothes

Where “clothes” features on this list of descending expenditure will depend on your household’s shopping habits. According to a 2014 report by “compare my spend” the average UK household spends £1,217 a year on clothing and footwear.

They also report that a quarter admit that they buy more clothes that they need. It’s probably the case that a lot more than a quarter of us do, but don’t like to admit it. This gives us a tremendous saving opportunity.

 

#82 – Clothes – Don’t Buy Big Brand Clothes

When you buy “branded” clothes, you’ll find that the brand itself is exactly what you are paying for. If we look into the 2014 financial statements of Hugo Boss, for example, in the notes to their income statement, we can take the following information:

Sale of goods: EUR 2.6bn

Cost of Sales: (EUR 0.8bn)

Other Selling Costs: (EUR 1.2bn)

Admin Costs: (EUR 0.2bn)

Net profit: EUR 0.4bn

Cost of Sales includes cost of purchase and conversion, and so is essentially the cost of the items that you buy from Hugo Boss. Therefore, if you buy a jumper from Hugo Boss for £100, you know that it only actually cost £30. Instead, £8 goes towards the general running costs of Hugo Boss, £16 goes to the shareholders of the company in the form of profit and the remaining £46 goes to other selling costs, the majority of which are “Expenses for Group‘s own retail business, sales and marketing organization” and “Marketing expenses”.

Long story short, when you buy these big brands, you are basically using your money to pay the big marketing machine.

Many people cite the motto: “Buy quality, buy once”. However, you have to remember that you aren’t actually buying £100 worth of jumper in our example above. You are still buying a £30 jumper, but you are paying a huge premium for the name on it.

We’re not against buying quality and completely agree that if you can justify the cost, then buy more expensive clothing. But, you can only really justify when there is genuine value. For example, if pair of shoes X will last 2 years and cost £50 and pair of shoes Y only cost £25 but will last 9 months, then the more expensive option are clearly better value.

Alternatively some products that are more expensive come with a genuine lifetime guarantee. Again, subject to changing fashions, it could be worth paying the premium here to get a product which last forever (or at least for the life of the company).

I’ve explained all I can – I’ll let Macklemore take over with his lyrics from “Thrift Shop”:

They be like, “Oh, that Gucci – that’s hella tight.”
I’m like, “Yo – that’s fifty dollars for a T-shirt.”
Limited edition, let’s do some simple addition
Fifty dollars for a T-shirt – that’s just some ignorant bitch
I call that getting swindled and pimped
I call that getting tricked by a business

Well said my man!

ACTION POINT: AVOID “BIG BRANDS”. YOU ARE PAYING MUCH MORE THAN YOU NEED NOT FOR A QUALITY ITEM, BUT FOR THE NAME ON THE CLOTHING.

 

#83 – Clothes – Visit Out Of Town Outlets

One great place to pick up a bargain is the out of town “outlet” stores. Often, major high-street stores will have out of town stores which are labelled as an “outlet” where you can buy end of season lines, or items which haven’t sold well in the shops. These are essentially a 365 day a year sale of the same clothes that you will find in store.

For example, say you need a new work outfit. Then a trip down to the M&S outlet can get you the same quality as the high-street store, but for between 30% and 70% off the original store prices. Bargain.

ACTION POINT: BEFORE HEADING TO THE HIGH STREET, CHECK OUT THE OUT OF TOWN “OUTLET” STORES FOR DISCOUNTS OF BETWEEN 30% AND 90% DEPENDING ON THE OUTLET.

 

#84 – Clothes – Shop In The Sales

But, it’s not only the outlets that have the great sales. In my opinion, buying clothes that are not in the sales is a huge waste of money. With the number of sales racks in shops all year round, there’s really no excuse not to pick up a bargain on your clothes.

A good tip here is to be prepared to plan ahead. For example, get your winter coat in the spring sales ready for next year and you could get a great quality coat for a minute fraction of the price.

One thing to avoid, just like in tip #78, is buying in the sales, BECAUSE the items are in the sales. Instead, you should always maintain a longer-term shopping list for clothing, and shop according to that.

So, sticking with the coat, if you need a new winter coat, get that on your shopping list months ahead of time to get a good deal in the sales. However, if you already have a perfectly good coat, then picking up a so-called bargain in the sales (say £200 reduced to £50) should still be thought of primarily as “a cost of £50”, rather than “a saving of £150”!

ACTION POINT: WHEN YOU HAVE DETERMINED THAT YOU NEED A NEW ITEM OF CLOTHING, LOOK AROUND THE SALES TO ENSURE THAT YOU CAN PICK SOMETHING UP MUCH CHEAPER THAN THE RRP.

 

#85 – Clothes – Don’t Be Afraid Of Charity Shops

To be honest, I started in tip #83, but I should have just skipped this whole section and just replaced it with lyrics from Macklemore’s “Thrift Shop”:

I’m digging, I’m digging, I’m searching right through that luggage
One man’s trash, that’s another man’s come-up

Yep, it does take some digging through the racks of, let’s say, less than desirable items, but with the cyclical nature of fashion, you’ll actually often be able to find some pretty cool stuff in charity shops. Again, as Macklemore says:

Thank your granddad for donating that plaid button-up shirt

And one final piece of advice from that same man:

Coppin’ it, washin’ it, ’bout to go and get some compliments

After you’ve bought that “hella” t-shirt for 50p, it’s probably a pretty good idea to get it straight into a good wash before you throw it on for the first time!

ACTION POINT: NEXT TIME YOU GO PAST A CHARITY SHOP, POP IN AND SEE WHAT’S ON THE RACKS – YOU MIGHT JUST BE PRETTY SURPRISED.

 

#86 – Clothes – Shop Online

Finally, you can get yourself online to find some great bargains. The concept of online only clothing retailers is that they can avoid all of the administration and running costs of physical stores, which from tip #82 we know make up the majority of the costs of the big brands.

From those Hugo Boss accounts, we saw that the cost of materials (how much the actual clothes were worth) only accounted for 30% of the revenue.

For online only retailer ASOS, that number is a much more respectable 50%. What’s more, these online shops even have virtual outlets, so you can take advantage of the great sales. For instance, at ASOS I could currently get some slim jeans reduced from their usual price of £32.00 for only £7.00 via their online outlet.

Also, don’t forget tip #109 and use cashback sites such as Quidco. For instance, I could get 10% off if I’m not a current customer of ASOS, reducing the price of those jeans down to £6.30 (including delivery). Also, you may want to consider “Zeek” to buy giftcards from people who no longer want them in order to get a further 5-15% off.

And, your searches don’t have to be limited to “traditional retailers”. There are some great bargains to be had on ebay, amazon and gumtree, amongst other sites.

ACTION POINT: SEARCH ONLINE (STARTING WITH GOOGLE) AND MAKE THE MOST OF THE ONLINE “SALES” AND “OUTLETS” SECTIONS TO FIND SOME GREAT REDUCTIONS ON CLOTHES THAT YOU NEED.

 

Ways To Save Money On Household Bills – Holidays & Travel

Again, this is usually a one-off annual expense rather than a monthly expenditure, but it should be something that is budgeted and therefore forms part of your “household bills”. The average household in the UK spend a whopping £1,951 on holidays and so when this equates to over £150 a month for most people, there must be some ways to save money of household bills by focusing on bringing down the costs of holidays.

Add to this the cost of travel (in and out of the UK) and there are some great opportunities to save big!

 

#87 – Holidays & Travel – Book Very Early Or Very Late

When it comes to travel (especially train travel), it’s almost always better to book as soon as possible.

Let me demonstrate this via a couple of examples.

Trains: Say I’m going from Edinburgh to London tomorrow morning (arriving before noon) and coming back in 3 days time (leaving London after 5pm).

The cheapest option available is £133.30 by buying two specific “super off-peak single” tickets.

However, if we have the foresight to book a few weeks in advance, the prices can drop significantly, with very similarly timed trains booking 3 months in advance only cost £79.40.

Finally, if you just buy the tickets at the station this morning, your best option would be a £229 return!

Therefore, on trains in this example, booking ahead could save over 65% compared to buying at the station!

 

Planes: This time let’s go from London to New York. If we go next week, with outbound and return one week apart, the cheapest return flights are £388 return. Not bad.

However, if we book in advance for next February, we can find the same flights for only £327 return. Not as good as the trains, but still a pretty healthy 16% off by booking in advance.

 

Automobiles: Finally, let’s have a look at the Megabus! We’ll take that same journey from Edinburgh to London. It takes a pretty painful 10 hours, but if you are not in a hurry, you can get tickets for tomorrow and back in 3 days’ time for a total of £46 return.

On a side note, it’s worth noting that this is 66% cheaper than taking the train.

If we book in advance, we can get that return journey much cheaper – for only £18 return!

That’s right, the single from Edinburgh to London costs £1!

So, for the bus option, booking in advance in this example saves us 61% compared to booking nearer the time.

Point proven!

ACTION POINT: PLAN YOUR TRIPS IN ADVANCE AND BOOK AS FAR IN ADVANCE AS POSSIBLE. FOR TRAINS AND BUSES IN THE UK, THIS CAN VARY FROM 6 TO 12 WEEKS BEFORE YOUR DATE OF TRAVEL.

 

#88 – Travel – Take Advantage Of Discount Cards

When travelling in the UK, there are also a wide range of discount travel cards that you can sign up to which will significantly reduce your fare. The most common are:

• 16-25 Railcard – for people aged 16-25
• Disabled Persons – for disabled persons
• Family & Friends Railcard – for those travelling with children aged 5-15
• HM Forces Railcard – for member of the regular forces or volunteer reserve
• Network – for those travelling in the “network” area (South-East England)
• Senior Railcard – for those aged 60 and over
• Two Together – for two named people travelling together

To see the cost and savings on one example journey (the Edinburgh to London trip above), then see the table below:

The network railcard also gives you a 34% discount on applicable journeys.

This is therefore a no-brainer. You can see that on that one journey, you are saving over £45 for the one-adult journey, over £90 on the two-together and over £170 on the family & friends card.

Each of these railcards only cost £30 per year (and for many you can pay £70 for a 3 year period) and so you can save money on your travel expenses even if you only make one trip a year!

ACTION POINT: DETERMINE WHICH RAILCARDS YOU ARE ELIGIBLE FOR AND HOW MUCH THEY COULD SAVE YOU ON ANY TRAIN JOURNEYS THAT YOU TAKE.

 

#89 – Holidays – Book Your Own “Package”

When planning your annual holidays, many people book package holidays. However, you will find that you’ll be able to save hundreds of pounds by researching your own package.

For instance, we booked a ski holiday for my stag do where the package deal worked out at £1100 per person, but by booking everything separately, we were able to find almost exactly the same thing (same resort, same flights, better accommodation, same ski passes, etc) for only £700 per person – a significant saving.

This also has additional benefits that you can make your package exactly how you want, rather than what the holiday package company wants it to be.

An additional tip is to go to a travel agent and ask them to build your holiday. For instance, a good friend of mine recently planned a long weekend to Las Vegas, with 4 nights in the Bellagio and was quoted £1000+ by Thomas Cook. They said that “this is the best price we can do”.

He then went out to comparison websites and found flights and the same hotel for the equivalent of £700 per person. A quick call back to Thomas Cook and they were all of a sudden able to match the price that my friend had found himself. Magic!

ACTION POINT: NEVER SETTLE WITH THE PACKAGE HOLIDAY THAT YOUR TRAVEL AGENT FINDS. LOOK FOR COMPARISONS YOURSELF AND FIND IT CHEAPER OR FIND BETTER OPTIONS FOT THE SAME PRICE. BEFORE BOOKING, GO BACK TO YOUR TRAVEL AGENT AND ASK THEM TO MATCH THE PRICE THAT YOU FOUND.

 

#90 – Holidays – Always Look At Return Flights

I’d heard this tip in the past, but it only truly hit me how much of an impact it can have when I was searching for flights earlier this week. So much so, I made a podcast on how to save money on flights. Again, let me demonstrate via an example.

I’ve decided that I need to fly from Newcastle (UK) to Montreal (Canada) and I want the flight on a set date, taking less than 14 hours. The cheapest single journey I can find is for £694 and takes 13 hours:

Now, I’m going to search for exactly the same flight, but I’m going to add a return flight with the outbound a week later. All of a sudden, on the same outbound flight day (and very similar times) but with less stops and 15 minutes shorter journey time, I now have a full return for £373:

Unbelievable. You can actually save almost 50% on the total price by taking an extra flight! Madness.

This isn’t a one, and it’s not just a US/Canada phenomenon. Another search for Manchester (UK) to Montpellier (France) is £255 for a single, but only £187 for a return which is on the same outbound flight as the single!

An added bonus tip for making the most of this “return trick” when you want to book a single, is that flexing that return flight (that you’re never going to take) can save you even more.

By using Google Flights, I can put in the outbound date for the single I want and put the inbound date one week in advance (this is often the cheapest). You can see that £378 option highlighted are the flights I found through Skyscanner above.

However, by clicking on the “flexible dates” on Google, you can see if there are any cheaper return options. Remember, the actual date doesn’t matter, as you won’t be taking this return anyway.

A quick scroll down shows that the £374 may be the cheapest I can do in this case, but in other examples, you could knock even more off by finding a cheaper “fake return” date.

ACTION POINT: IF YOU NEED TO BOOK SINGLE AIR FARES, ALWAYS CHECK IF IT’S CHEAPER TO BOOK A RETURN AND SIMPLY DON’T USE THE RETURN FLIGHT. USE GOOGLE FLIGHTS’ “FLEXIBLE DATES” OPTION TO FIND THE CHEAPEST RETURN

 

#91 – Holidays – Embrace The Outdoors

Many people dismiss camping as a pastime for hippies! However, embracing the outdoors on your holidays can significantly reduce the cost of your accommodation.

Say you are driving round France for a couple of weeks and decided you wanted to stay in the town of Chateauroux – the birth place of Gerard Depardieu didn’t you know!

A week in a hotel for two adults and two children in a very basic 2-star hotel for a week in May would set you back £261 for the week. Not bad at all.

Alternatively, you purchase a 5-man tent (we’ve just got one for £80 new) and you could visit the local campsite there, which has a beautiful lake and park just adjacent, has activities on site (including swimming pool, pétanque, ping-pong, etc), very good cleaning and washing up facilities, indoor toilets and ever its own boulangerie. A night camping there is EUR 20 per night, which at current exchange rates would equate to around £98 for the week.

Therefore, for your accommodation, you could buy your tent (which obviously you can use again) and the pay the camping site fees for the week, and still save over £80 compared to the cheapest hotel in town!

And, if you ask anyone who went camping when they were a kid, which holiday they enjoyed more – the one where they were cooped up in a 2-star B&B or the adventure of camping, I’m pretty sure that there’d only be one answer!

ACTION POINT: WHEN PLANNING YOUR HOLIDAY ON A BUDGET, CONSIDER IF CAMPING MAY BE A CHEAPER (AND MORE ENJOYABLE AND ADVENTUROUS) ALTERNATIVE TO HOTELS OR B&Bs.

 

#92 – Holidays – Prepay Your Parking & Car Hire

This is two tips in one: but both are related to booking in advance.

The first is airport parking. You will find that airport parking, if booked upfront with discount providers (and using Quidco to save even more), then airport parking can be a lot cheaper (and more convenient) than other alternatives such as public transport.

For instance, if you live an hour away from the airport, you might find that driving your family to the airport and paying as little as £19.99 for a weeks’ parking depending on the airport is a much more viable option that carting your luggage onto buses or trains.

To find out more on getting airport parking for cheaper, check out our article on saving money on airport parking.

The second area is car hire. Car hire can be incredibly expensive when booked near to the time, or even worse if you just walk into a branch. Instead you should use a price comparison service, well in advance, to find the best deal.

A quick example: say I’m travelling to Florence, Italy for a week in November and I want to hire a car for a week. If I book in advance with Auto Europe (a price comparison site), I can get a Renault Clio or similar (economy class) for £92.91 for the week. When we go through Quidco, you can get another % off (6% at the time of writing) which would bring this down to £87.34:

Say instead, I went directly to Europcar and booked on the same dates, that price for the same vehicle class (economy) is £127.32 if booked online:

Finally, if I tried to get the same car for a week starting tomorrow, the online quote (which will still be cheaper than walking in on the day) is a whopping £154.47 if booked online.

If booked online and paid for on the day this would increase again to £174.80.

So, by comparing pricing and booking upfront in this example, we’ve saved 55% on the cost of the car hire! Again, for a detailed guide to finding the cheapest car hire upfront, read our “finding cheaper car hire” article.

ACTION POINT: COMPARE PRICES ON BOTH CAR HIRE AND AIRPORT PARKING AS FAR IN ADVANCE AS POSSIBLE TO GET THE BEST DEALS. SAVINGS OF OVER 50% ARE EASILY POSSIBLE FOR BOTH.

 

Ways To Save Money On Household Bills – Entertainment

As we move down the categories, the expenditure becomes more and more optional and therefore you can often make much bigger savings if you are willing to take some short-term pain for bucket loads of long-term gain!

Your entertainment budget, is by very nature, optional. As such, your first question for ANY expenditure within it is…

 

#93 – Entertainment – Is It Really Worth It?

You see, in the flow chart, the answer for entertainment against the question “Do I need it” is always no, and most of the time, the answer to “Do I REALLY want it?” will also be no, because there may be better alternatives that are much cheaper if you use your bonce!

For example, a night out at the cinema…

This article was written by us in August 2013 and so a lot of the costs may be out of date. However, at the time, we concluded that a night out at the cinema for two adults and two children (for an ODEON cinema – not even in 3D) could cost a whopping £80. This includes 4 cinema tickets, 2 large popcorn and drinks (to share between 4) and 4 ice-creams.

Instead, by bringing movie night back home, you could buy a DVD and all snuggle up on the sofas with the same food and drink for less than £9 in total. Is it really worth that huge expense just to “go to the cinema” when the same result can be achieved at home for about 90% less.

Eating out is a similar thing. A bottle of wine and a sub-standard 3 course meal in a chain restaurant could easily cost you £100 as a couple. Instead, why not light that candle at home, buy some good wine, the most expensive steak and a nice starter and desert and you’ll struggle to spend even half that for much higher quality food.

Again, something we’ve explored in the past in: is it worth eating out? For me, the answer is a resounding no!

ACTION POINT: ASK YOURSELF IF IT’S REALLY WORTH GOING OUT AND SPENDING POCKETS FULL OF CASH ON ACTIVITIES OR EXPERIENCES THAT YOU COULD REPLICATE, OR INDEED EMULATE, AT HOME FOR A FRACTION OF THE COST.

 

#94 – Entertainment – Never Eat, Drink Or Play At Full Price

If you’ve read tip #93 and you think that I’m an absolute bore, firstly remember that I’m approaching this from the angle of someone who is specifically looking to cut their budget and save money on household bills.

If you still think eating out is worth the cost, then please never pay full price. Instead, try to do the following:

• Use sites like Groupon, where you can get huge discounts on meals at small, local restaurants
• Search online for vouchers for the larger chain restaurants – there’s almost always a discount deal running at the restaurants
• Take advantage of lunch and “early-bird” special deals.

I try to never pay full price when eating out, which is a great way to cut your entertainment budget if you are used to eating out regularly.

Also, it’s not a “discount” as such, but some restaurants allow you to bring your own drink. Most restaurants make their highest discounts on their drinks menu, so these places can help you cut the cost of your meal significantly.

ACTION POINT: DON’T EVER PAY FULL PRICE WHEN EATING OUT. FIND A COUPON, DISCOUNT OR EARLY BIRD SPECIAL TO SAVE UP TO 50% ON YOUR BILL (AND SOMETIMES EVEN MORE).

 

#95 – Entertainment – Take Advantage Of Free Days & Events

Finally, try to scope out free days and events, rather than paying full price for events such as festivals, museums, etc.

To helf you find free events, there is a great site called Visit Britain, which has a specific section for cheap & free days out and activities.

Searching for London, for example, gives you a great list of top free attractions, arts & culture, parks and all other things to keep you busy for free in the Capital.

ACTION POINT: SEARCH YOUR LOCAL REGION FOR FREE EVENTS FOR YOU AND THE FAMILY (ESPECIALLY IN THE SUMMER HOLIDAYS). EVENTS DON’T HAVE TO BE EXPENSIVE TO BE ENJOYABLE – REMEMBER: THE BEST THINGS IN LIFE COME FREE!!

 

Ways To Save Money On Household Bills – Vices

With “vices”, saving money may not be your primary reason to change your habits. For smoking for instance, the health factors are much more important. However, seeing that line bringing down your monthly budget might just act as the straw that broke the camel’s back.

 

#96 – Vices – Stop Smoking

This doesn’t need to be a long tip does it? You know you should stop smoking. Well, now your budget is another driver for doing so. According to our calculations, giving up smoking could save you up to £110,000 over the course of 25 years. Therefore, by giving up smoking, you could probably work for 2 years less when you reach retirement.

ACTION POINT: JUST STOP SMOKING. HOWEVER YOU CAN – JUST STOP – ITS KILLING YOU BOTH FINANCIALLY AND LITERALLY!

 

#97 – Vices – Cut Down On Drinking

Especially in the pub! Again, our calculations on the savings you could make by not buying that daily cappuccino, and by buying one less pint down the pub every week, would lead to a quite unfathomable £100,000 over 25 years.

Again, think about whether that short-term treat of buying that daily coffee (rather than making your own) or cutting back on that weekly beer could genuinely mean that you could retire a year or two earlier. Just like with smoking, that’s got to be worth cutting back for hasn’t it?

ACTION POINT: REPLACE THE COFFEE THAT YOU BUY FROM THE HIGH STREET COFFEE SHOP WITH A HOME MADE FLASK AND TRY TO LEAVE THE PUB ONE BEER EARLIER FOR SOME HUGE SAVINGS IN THE LONG TERM.

 

#98 – Vices – Gambling (Including The Lottery)

The other most common vice – gambling – is an obvious and direct drain on your finances. And that includes the lottery. The expected return on a £1 lottery ticket is a tiny 45p. That means that as soon as you buy your ticket, you are losing over half of your money.

All gambling is the same, although many are not quite as bad as the lottery (which for some reason is considered more acceptable by the UK public). The return on £1 bet on blackjack (if played optimally) is 94p, and roulette by betting on a single number is 95p. Whichever way you look at it, you are losing money.

Also, remember that premium bonds is effectively gambling, but is gambling against future inflation. It is estimated that if you held £10,000 in premium bonds for 10 years, with average luck you would win around £1,000 in that period. This would give you £11,000 back 10 years later.

To obtain £11,000 from an original investment of £10,000 you would only need to earn 0.92% interest on your investment. With the FTSE 250 paying an average of 8-10% (inc. dividends) annual returns over that kind of period, then you are losing out big by “investing” your money in premium bonds.

ACTION POINT: STOP GAMBLING – THE ONLY PERSON WHO WINS IS THE BOOKIES (IN WHAT EVER FORM THEY TAKE). THE NATIONAL LOTTERY’S SLOGAN OF “IT COULD BE YOU” IS TECHNICALLY TRUE…BUT A MORE ACCURATE SLOGAN SHOULD BE “IT WILL ALMOST ALWAYS BE YOU WHO BECOMES POORER BY GAMBLING”.

 

Ways To Save Money On Household Bills – Childcare

Not applicable for everyone (skip to the next section if you don’t have young children), but incredibly relevant for anyone with kids. Childcare costs have risen in the past years way ahead of overall inflation and can now be a huge burden on new parents. To make sure that your annual budget isn’t demolished by childcare costs, you should take a look at the following tips:

 

#99 – Childcare – Be Nice To The Grandparents!

This is probably the childcare tip that is most relevant to the majority of new parents. How often can you find a babysitter who loves you and your new children so much that they would actually want to look after them for free? Not very often. However, the children’s’ grandparents are exactly this. So, be nice to them.

Also, you could even make an agreement with them that suits both parties. If you are paying a nanny £10 per hour, it would be a good deal for you to pay your parents £5 per hour to look after the little ones whilst you are at work a couple of days a week. Equally, they may be happier to do more hours with the bairns if they get rewarded (with more than just love) for doing so.

ACTION POINT: BE SUPER NICE TO YOUR PARENTS – THEY WILL PROBABLY BE THE CHEAPEST FORM OF CHILD CARE THAT YOU’LL EVER BE ABLE TO FIND!

 

#100 – Childcare – Take Advantage Of Tax Credits

Any parents in work may be eligible for tax credits. They are designed by the government to make it more financially profitable for parents to return to work rather than staying at home to look after their children.

As per the gov.uk website, you can get 70% of eligible childcare costs up to a maximum of £122.50 extra per week for one child, £210 extra for two or more, but the exact amount will depend on how much you earn.

You may qualify for extra tax credits to help with childcare if:

• you’re responsible for the child
• you work at least 16 hours per week
• the childcare you pay for is registered or approved
• your child is under 16, or under 17 if they’re disabled
• your total household income is under £46,000

ACTION POINT: TO APPLY AND CHECK YOUR EXACT ELIGIBILITY TO RECEIVE TAX CREDITS TO HELP WITH CHILDCARE, YOU CAN CALL THE TAX CREDIT HELPLINE ON 0345 300 3900.

 

#101 – Childcare – Look For Childcare Vouchers From Your Employer

In addition to tax credits for childcare, you could also be eligible for “childcare vouchers” which can save parents with children under 16 over £1,000 every year. You will need to check with your employer if they offer a “childcare voucher” scheme, but most do.

The concept is that (like a pension contribution) you get to pay for your childcare vouchers before the tax man gets their hands on your salary.

Both parents are allowed to claim £243 per month of vouchers. Therefore, if both parents claim the maximum, that is £486 per month. If both parents are basic rate tax payers, taking the childcare vouchers will effectively save approximately 30% which would usually be charged as income tax and national insurance. Therefore, two parents could be saving around £150 per month on childcare if they maximize their benefits.

This sounds great, but there is a word of warning here. By taking childcare vouchers, your eligibility for tax credits for childcare from tip #100 may be impacted. Therefore, depending on your salary and eligibility, it may be better to only take the tax credits, or to take a mix of tax credit and childcare vouchers to maximize your savings.

If you want to find out the best mix for you, use the HMRC childcare vouchers calculator here.

ACTION POINT: ASK YOUR EMPLOYER IF THEY OFFER CHILDCARE VOUCHERS AND COMPLETE THE HMRC CALCULATOR TO DETERMINE WHETHER YOU CAN SAVE MONEY BY TAKING THE VOUCHERS OFFERED.

 

#102 – Childcare – Shop Around

Many people automatically go for certain childcare due to one factor alone. This may be either:

• it’s the closest to home
• it’s the closest to work
• other people you know go there
• they have the best reputation

However, like everything else on this list, you should be shopping around for your childcare options to find which one is the best VALUE (a combination of price and quality). Obviously, you won’t want to send your children to the cheapest childcare if it’s detrimental to them. However, with prices of childcare varying dramatically within the same area, you may be spending much more than you should be for your childcare costs.

ACTION POINT: DON’T BE AFRAID TO SHOP AROUND. YOUR CHILDREN’S WELL-BEING IS OBVIOUSLY THE PRIORITY, BUT BY SHOPPING AROUND YOU MAY BE ABLE TO FIND BETTER VALUE (NOT JUST CHEAPER) CHILDCARE.

 

#103 – Childcare – Maybe It Could Be An Income Opportunity

Here’s another way to look at the problem of childcare. Say you decide that you want to be a stay at home parent (at least some days a week). Then, if you love kids, you might find that other parents in your area (including friends and family) would be willing to compensate you financially for looking after their children as well.

Before you do this, you should visit “Pacey” – the professional association for childcare and early years – to work out what steps you need to take to become a childminder.

Additionally, you’ll need to understand the tax implications of doing so as you will be earning income from this venture and may need to declare this for tax reasons.

Equally, whilst we all know that being a “stay at home parent” is far from a doddle, there may be other jobs that you can do from home where you can earn some income to keep the family finances ticking over – getting paid to do other peoples’ ironing and washing for example.

ACTION POINT: IF YOU’VE DECIDED TO BE A STAY AT HOME PARENT, CONSIDER SOME WAYS THAT YOU COULD EARN EXTRA INCOME WHILST DOING SO TO FILL ANY EARNING GAPS THAT ARE CREATED FROM LEAVING WORK.

 

Ways To Save Money On Household Bills – Personal Care

We’re getting there folks…this is our penultimate category – personal care. Costs in this category will vary greatly per person and will often depend on your gender (I hope it’s not too sexist to say that!)…

 

#104 – Personal Care – Cut Your Own Hair

This one is a little more applicable for men than women, but based on comments I’ve received on this article, cutting your own hair for free is actually a possible option for those looking to save money on household bills by cutting out the expensive hairdresser costs.

It’s always a good idea to get someone else to help out (especially with the back), but I would say that many people can get the look they want more closely if they do it themselves compared with explaining what you want from the hairdresser.

The biggest positive of all is that you get to avoid this happening at the hairdressers every time:

ACTION POINT: CONSIDER CUTTING YOUR OWN HAIR AT HOME IF YOU WANT TO SAVE MONEY ON GOING TO THE BARBERS/SALON. WATCH THE YOUTUBE CLIPS ON THE LINKED POSTS IF YOU ARE UNSURE WHERE TO START.

 

#105 – Personal Care – Never Buy From The Salon/Barber

For many, tip #104 will be one step too far and they’ll still want to go to the salon, hairdressers or barbers to get their hair cut. That’s fine.

However, if this is you, never buy any products from them. The markup will be extortionate, and you’ll be able to buy similar (and often exactly the same) products from stores like Wilkinson’s or Superdrug for a fraction of the price.

ACTION POINT: NEVER BUY ANYTHING (OTHER THAN YOUR PLANNED HAIRCUT) FROM YOUR SALON – YOU CAN FIND THE SAME THINGS MUCH CHEAPER ELSEWHERE.

 

#106 – Personal Care – Use The Sales

Just as with clothes, we would recommend that you keep a long-term list of the personal care items that you use. When these items are on sale, you can bulk buy to ensure that you will get them cheaper.

However, as with tip #78, don’t get sucked in by special offers on personal care products that you don’t need, or that you wouldn’t usually buy, just because they are in the sale (unless they are actually cheaper than the same product that you need or usually buy in bulk).

Also, take the “no-brand” challenge, tip #72, and apply it to your personal care purchases.

ACTION POINT: TRY TO BULK ITEMS THAT YOU REGULARLY USE IN THE SALES IN ORDER TO SAVE MONEY ON YOUR REGULAR EXPENDITURE.

 

#107 – Personal Care – Do You Need The Daily Fragrance

Another potentially controversial one, but do you really need the daily fragrance? Yeah, you’ll want to smell super good for a night out, but if you are going to work, do you need to cover yourself in Chanel perfume? A good wash and a nice portion of antiperspirant covers the question of “need” (i.e. you NEED to not smell like a tramp for work), but the perfume or aftershave is on the “really want” question board.

Cutting a £50-£60 bottle of smelly out of your budget every few months may be an easier saving that some of the other things that you are considering on this list…

ACTION POINT: CONSIDER CUTTING BACK ON THE PERFUME/AFTERSHAVE FOR EVERY DAY EVENTS (LIKE GOING TO WORK) IN ORDER TO REDUCE YOUR MONTHLY EXPENDITURE ON SMELLIES…

 

#108 – Personal Care – Squeeze The Last Bit Out

Finally, squeezing that last bit out of the tube, bottle or packet could add up over time. Say you waste the last 5% of every tube of toothpaste you use, then over the course of the year, that might run up to several pounds of wasted product.

The same is true for shower gel or shampoo, and many make-up and moisturizer products.

ACTION POINT:  FOR BOTTLES, GET THE LAST BIT OUT BY MIXING WITH WATER. FOR TUBES, CUTTING THE TUBE IN HALF WILL OFTEN LET YOU SCRAPE THAT LAST BIT OUT. IT’S NOT GOING TO MAKE YOU A MILLIONAIRE, BUT EVERY LITTLE HELPS (YOUR WALLET AND THE ENVIRONMENT).

 

 

Ways To Save Money On Household Bills – Other

Finally, here are a few miscellaneous tips that will help you cut back on any other expenses that you have every month.

 

#109 – Other – Don’t Pay For Things You Don’t Need To

From our flowchart, you’ve now asked yourself the question “Can I Get It Cheaper?” for every single item that you either need, or really want. Good work.

However, you should also ask yourself “Can I Get It For Free?”. You see, free is a type of cheaper!

This can apply for almost anything, and you’d be surprised what you can get for free that you usually pay for – you just need to do a bit of searching. For example, there are many communities that exist, such as freecycle, where you can pick up unwanted items from other people (especially things like kids’ toys and furniture).

To find these things, typing “xxx yyy zzz FOR FREE” into google is a very sensible starting point!

ACTION POINT:  LOOK AROUND TO SEE IF YOU CAN GET GOODS, PRODUCTS AND SERVICES YOU USUALLY PAY FOR FREE OF CHARGE. YOU’D BE SURPRISED HOW OFTEN YOU CAN WHEN YOU CHALLENGE YOURSELF.

 

#110 – Other – Always Check CashBack Sites Like Quidco

We’ve alluded to it A LOT in these 111 tips, but almost every expenditure that you make online (and many that you make on the high street aswell) can be made cheaper by using cashback sites like Quidco.

Another service which I’ve personally started using heavily recently is Zeek. This allows you to buy from other people who are selling unwanted gift cards and vouchers for under the face value of the card. For example, I’ve been able to get over 5% off on major supermarket vouchers, over 15% on Sports Direct and a whopping 20% on high street restaurants. These gift cards just act like a debit card, and so can also usually be used alongside (rather than instead of) other discount vouchers.

For a full explanation, our review and a promo code where you can get £5 free credit, head on over to our How Good Is Zeek article here.

ACTION POINT: READ OUR GUIDES AND SIGN UP TO CASHBACK SITES LIKE QUIDCO AND VOUCHER SITES LIKE ZEEK TO SAVE EVEN MORE ON YOUR EXPENDITURE.

 

#111 – Other – Educate & Motivate Your Family

Finally, you shouldn’t tackle this alone. It is completely pointless spending all your time and energy slashing your monthly expenses if your spouse, partner or children undo all your good work by increasing their expenditure elsewhere.

To avoid this problem, it’s essential that you all work together in making your monthly budget and analyzing your monthly expenditure against it in the future. The key: make it fun.

We personally have our “month end date night”. The spreadsheet work is combined with some nice grub and a glass of wine, and all of a sudden it’s not quite such a chore.

Also, set yourself targets and goals each month, and if you hit them rewards yourself and each other. It’s amazing how much more you can achieve when you know there is a prize waiting at the end of the month is you win “the budget game”!

ACTION POINT: MAKE THE MONTHLY BUDGET FUN. GET YOUR WHOLE FAMILY (AND ANYONE ELSE THAT IMPACTS YOUR FINANCES) ON BOARD AND WORK AT IT TOGETHER AS A UNIT. YOU’LL FIND YOU CAN ACHIEVE MUCH MORE WHEN YOU WORK AS A TEAM!

 

 

We Haven’t Finished Yet…

Really? After 111 ways to save money on household bills and over 28,500 words, there’s still more. Oh yes, indeed there is…

Firstly, they’ll be many things in your own personal budget that I haven’t included on this list. Every single household has their own personal expenses that will be different for everyone. That’s why it’s called PERSONAL finance!

So, create that budget in detail, and work through every single category (and even down to an item level if you are really looking to save money on household bills, and follow this flowchart for each:

You’ll soon see your monthly expenses come tumbling down, meaning that you can put that hard earned cash to much better use!

Secondly, once you’ve saved all this money, you need to start investing it for the long term. Want to know how? Well, come back next week to read our all new “Best Long-Term Investing Strategy”.

 

Leave Us Some Comments…

Tell us what you thought. If you’ve got some other ideas to save money on household bills, add them as #112 and so on in the comments so others can benefit from your ideas.

Alternatively, if you have a comment or question on any of our tips, reference it with the # and let me know what you think.

Happy saving everyone!!