How to Save at least £50 a month (without getting a pay rise)

28-Jan-2010

One of the main reasons for the financial struggle in the week before payday is not a lack of money as such, it's a lack of organisation.  With a small amount of planning you can get to the end of the month before your funds run out, and even have some left over. Below are some tips to get you off to a good start.

1. Have one less cappuccino a week and don't go at weekends

It's just one cappuccino, what harm can it do?  Well, it can make quite a dent in your wallet for one thing.  If you normally fill up on caffeinated froth every morning, plan to go without on Wednesdays, for example, and go cold turkey at weekends.  Check out our free Starbucks habit calculator to see how much your coffee habit is setting you back (equally applicable to other coffee brands obviously!).  In the SimplyFinance team, we were pretty surprised by our combined coffee spend and are now taking steps to kick the habit, or at least switch to instant.

2. Bring your lunch into work at least 2 days a week

Let's face it, we are all aware that making a sandwich is cheaper than buying one, especially when you're buying one of those elaborate ciabatta creations every day that will set you back a fiver a time.  For most of us, the problem is not a lack of awareness, more a lack of time and a shortage of ideas.  Well, it's time to get creative - a homemade lunch doesn't have to be a slightly squashed sandwich in your desk drawer.  If your office doesn't have a microwave, bring in a thermos of soup and a big salad in an airtight container.  There are some great ideas here, or just search online for 'lunch ideas'.

3. Shop online to avoid the 'magpie effect'

That's right, the moment when something shiny catches your eye, and the sensible winter scarf you went in for turns into three T-shirts (on offer) and a pair of boots.  And whichever way you look at it, 3-for-the-price-of-2 is not a bargain.  You didn't want three books, you wanted one book, and now you've paid double for it.  The best way of avoiding the sneaky false bargains is to not put yourself in temptation's way.  Shop online wherever possible, especially for groceries.  In some online supermarkets, you can even keep all your regular purchases in one place.

4. Don't buy bottled water

According to consumer champion Which?,  tap water costs around 0.22p per litre.  When you consider that bottled water starts at 8.5p per litre, and that we're advised to drink around 1.5l of water a day, the costs soon start adding up.  It's easy to be swayed by the marketing on bottled water that promises clean, pure and natural water - UK tap water could make exactly the same claims.   If you're skeptical, do a blind taste test, and see if you notice the difference.  Another reason to switch to 'eau de tap' is an environmental one, think of all the empty bottles that go to landfill each year.

5. Use your consumer muscle

Now more than ever, the companies that provide your insurance need your business.  This means that you are in the driving seat, and should see your approaching renewal date as the time to do some serious haggling.  Many service providers actually employ 'retention' teams whose sole job it is to talk you out of leaving them.  Look at how much you are currently spending on your home insurance, health insurance or car insurance, and set a target renewal premium.  It is a good idea to shop around and talk to other providers before making that call - your case will be much stronger if you can get your current insurer to match another quote you have been given.  You can request a callback from a health insurance adviser or a home insurance adviser by filling out the short forms - no obligation, free to use, and this will give you a clearer idea of what you can potentially get.  One word of warning, all insurance policies are not equal, read the small print before signing up and don't skimp on cover for the sake of a few extra pounds.

6. De-junk your bank account

Are you actually reading the newspaper or magazine that you subscribe to?  If not, cancel the subscription.  Do you even remember what that monthly Ã?Â?Ã?Â?Ã?Â?Ã?£5 direct debit is for?  If not, get rid of it, you could still be paying the insurance on a mobile phone that you cancelled a long time ago.  Just as you would have a spring-clean of your wardrobe, go through your bank statement with a fine-toothed comb and ruthlessly get rid of anything that you are not using.  Use the same logic for your banking 'extras' - if you're paying Ã?Â?Ã?Â?Ã?Â?Ã?£7 per month for breakdown cover and roadside assistance when you don't even drive, that's just not a very good deal, is it?

7. Buy own-brand medication

For every 'extra' and 'max strength' product on the shelves, there will be a generic equivalent, and it will have exactly the same effect because it contains exactly the same ingredients.  Check the ingredients list on the back of your Anadin Extra, and then compare it with the equivalent own-brand painkiller in Boots, for example.  The only difference will usually be in the price, and it may surprise you to learn that you could save Ã?Â?Ã?Â?Ã?Â?Ã?£2-3 a packet. However, if it is the pretty packaging that you go for, feel free to keep paying a premium!

8.  Never pay full price for going out

One side-effects of the recession is that the voucher culture has exploded.  People are going out less, so theatres, restaurants and cinemas are happy to offer deals to attract in the crowds.  Try Toptable.com for deals on eating out, and any number of theatre websites can be found by searching online for the play that you want to see.  The National Theatre has teamed up with Travelex to offer Ã?Â?Ã?Â?Ã?Â?Ã?£10 tickets to most shows, and Lastminute.com offers half-price cinema tickets on some weekdays (search under' Entertainment').  

So what should you do with the money you have saved?  There are a number of options for stashing your savings, so have a look at our pages on savings accounts, Cash ISAs and Stocks and Shares ISAs for a few ideas on getting the most out of your money.