In a recent article from the end of September, I let you guys know how I saved £10,000 in a year towards my house deposit:
“By dramatically reducing my living costs, selling my old clothes, making extra money where I can, shopping second hand, giving up nights out, staying in, eating healthily, using coupons, getting a new job, investing my money in premium bonds (I’ve had a few miniature wins this year), and generally spending as little as possible, I’ve managed to successfully save £10,000 in the space of a year!”
In today’s post, Graham Clark from Moneystepper expands further on this by giving one tip relating to some of the areas above to help you increase your savings, whether it be for a house deposit or anything else.
The tip numbers correspond to the reference number from his monster post of 111 ways to save money on household bills. If you want further detail on any of these tips, or any number of other great tips and ideas, head over to the link above to find out more. Over to Graham…
“Reducing my living costs” – Tip 24 – Change Your Driving Style
We could have picked from around 80 of the 111 ways to save money to cover reducing living costs, but we thought that this was one of the most interesting. After carrying out an experiment back in November 2014, we found that by making seven changes to my driving style (which was already conservative), I was able to increase my average mpg by over 25%:
- Driving in the highest gear possible
- Avoiding high speeds (optimal fuel efficiency is at 55mph)
- Not accelerating too quickly
- Avoiding heavy breaking
- Maintaining the correct tyre pressure
- Not leaving the car idle
- Removing unnecessary weight from the car
That obviously brings down fuel costs by 25% immediately, but also repair and maintenance costs by potentially even more!
“Making extra money” – Tip 110 – Use Cashback Sites Like Quidco
Whilst we have many ways to earn extra income on our site, there are even ways that you can earn money when making your usual expenditure. Using Quidco for all your online purchases allows you to earn cashback on the goods and services that you buy with no additional cost of effort.
For example, we bought breakdown cover last month (roadside assistance and relay) which ranged, depending on provider from £60 to £90.
However, by going with Quidco, we found that annual RAC cover was £69.99 and if booked through Quidco, you received £40 cashback which has already hit my account!
“Shopping second hand” – Tip 85 – Don’t Be Afraid Of Charity Shops
I love Jenni’s suggestion of shopping second hand. You pay a HUGE premium for buying new. Depending on the figures you believe, new cars lose anywhere between 20% and 50% of their value the moment you drive them away from the dealership. New electronics (TVs, mobile phones, etc) can be incredibly expensive compared to a second hand, reconditioned or previous motel. And, if you take it to the extreme, new clothes (especially high quality and designer clothes) can be extortionate new. This is why we (and your friend Macklemore) have nothing against having a good search for hidden gems in charity shops:
I’m digging, I’m digging, I’m searching right through that luggage;
One man’s trash, that’s another man’s come-up!
Spot on my friend! 🙂
“Giving up nights out / staying in” – Tip 95 – Take Advantage Of Free Days & Events
“Entertainment” is usually one of the largest parts of anyone’s discretionary expenditure, and the majority of this comes from eating and drinking out, or paying to go to events. And whilst we don’t want you to have to sit at home every night in order to save money for your deposit, cutting back on some nights out and meals in town can have a significant impact on your budget.
So, why not replace those costs nights out, with free days out. Embrace the outdoors – there’s nothing more liberating that a nice walk or cycle in the countryside, or along the banks of your nearest river.
Moreover, there’s always some free events going on in your area (usually organized by local trusts, charities or promo events) that will interest you. Get yourself online and see what’s going on in your area in the coming months. But remember: eating and drinking out on these days can be expensive too, so we’d advise that you take a lovely picnic!
“Eating healthily” – Tip 70 – Plan Your Meals
Eating healthily isn’t expensive. It’s a myth. What is expensive is eating what I’d call “health foods”. Packaged salads at prêt-a-manger, supposed health bars (these are usually packed with sugar), etc.
Avoid these “health foods” and stick with healthy and nutritional foods that you can make yourself from home. By planning your meals (and snacks) up front for the week, you’ll save pounds (the good kind of pounds) from your shopping bills and, as an added benefit, you’ll be losing pounds (the bad kind of pounds) from your waist!
Also, it’s worth checking out websites such as Approved Food as you may be able to save a ton of cash on your shopping while saving the planet in the process.
“Using coupons” – Tip 77 – Couponing Isn’t Dead
Whilst cutting coupons out of magazines does seem like a very 1980s activity, that doesn’t mean that couponing is dead. It’s just moved. You can now find a huge number of couponing sites online, where you can get reductions on a wide range of groceries and household goods.
However, be careful and don’t get sucked in. 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!
“Investing my money” – Tip 11 – Make Sure You’ve Tax Wrapped Your Investments
Take care of your savings. Whilst the tips above are great, you don’t then want to have to pay more tax on your savings interest (or dividends if you are investing in the long term) due to bad tax planning.
Spend some time to make sure that you understand the tax advantages of saving in ISAs and pension (and even VCTs and EISs if you are an expert investor), and work out which is the best way to invest your money.
If you need some guidance for your own personal situation, you might find our comparison of ISAs vs pensions useful.
“Spending as little as possible” – Overall – Use The Flowchart
I couldn’t choose just one tip for this area. Instead, I would like to draw your attention to the flowchart that we use to help us restrict our spending and start saving. Print it out, memorise it: this flowchart will be a great tool to help you reduce your expenses and get you into that dream house (or whatever else you are saving for) quicker than you thought was possible!