How to save money
With most of us juggling umpteen different things at the same time, it can feel impossible to keep tabs on what's coming in and going out each month, so we forget how to save money and let our finances slide.
But for those of us who don't have the time, or inclination, to keep spreadsheets of our finances, there are a few simple steps to ensure we live within our means.
It sounds obvious, but the first thing you need to do is to identify exactly what you are spending your money on. So, sit down with your bank statement and write down how much goes on bills, such as your mortgage, utilities and council tax, and then how much you spend on going out, clothes and other expenses. If you're going into the red every month to cover all these costs, then it's time to set yourself some rules...
Hunt down discounts
Never buy anything without seeing if you can find it more cheaply elsewhere, or if there is a discount code available to get you money off.
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There are numerous online voucher code sites so before you head to the shops or go for a family day or night out, it's worth checking what offers are available as there are serious savings to be made.
This might sound time-consuming, but once you've got into the habit of checking them regularly, it will soon become second nature and you can enjoy the fact you're getting a bargain.
Earn money while you spend
A cashback credit card or one that enables you to earn reward points can be a great addition to your purse as you earn something back on all your spending.
With a cashback card you earn a percentage of whatever you spend on the card and this is usually credited to your credit card account annually. Reward cards work in a similar way albeit your earn points rather than money.
How you can spend the points will depend on the card. With Tesco's Clubcard credit card for example, you can exchange your points for vouchers and get a reduction on your supermarket shop or use them for things like family days out. Sainsbury's also offers a credit card which enables you to earn Nectar points, and with the M&S credit card your earn points which are converted into M&S vouchers.
The key is to make sure you pay your credit card bill off in full each month, otherwise the interest you'll pay will outweigh the value of your cashback or rewards. The simplest thing is to set up a direct debit for the full amount. This will ensure you always pay your bill on time and clear the balance.
Give your finances a thorough review
Sort through all your financial paperwork to see where you can cut costs. This means checking whether you are on the most competitive mortgage rate possible, ensuring your savings are earning as much interest as they possibly can, and switching your gas and electricity tariff if you can find a better deal elsewhere.
If it helps, pin up a financial wall planner with all the dates you need to help you stay on track. So, if you've put your money in a high interest account, but the rate includes a bonus which disappears after a few months, make a note of when this goes and move your money to a different account then.
Similarly, if you've moved credit card debts onto a balance transfer card offering a 0% introductory period for a year or more, diarise when the 0% period ends so you can switch your debt again and avoid paying high rates of interest on what you owe.
Don't pay more tax than you need to
Every year millions of pounds are handed over to the taxman unnecessarily, so make sure you aren't boosting his coffers any more than you have to.
Every person in the UK is allowed to earn a certain amount of money each year without paying tax. For example, in the tax year 2012-13, we each have a personal allowance of £8,105, with higher allowances available to those aged 65 and above.
If you're married and one partner is not working, it makes sense to transfer savings accounts over to them, so that you pay less tax as a couple. If you don't make use of your personal allowance in any tax year, you cannot carry it forward to the next year.
You can also reduce your tax bills by making sure you use your individual savings account (ISA) allowance each year. ISAs allow you to save money free of income tax and capital gains tax. In the 2012-13 tax year, you're allowed to put £5,640 into a cash ISA, and the same amount into a stocks and shares ISA, or you can put the whole £11,280 allowance into stocks and shares.
Any allowance not used by the end of the tax year on 5 April each year will be lost forever.
If you regularly throw food away, then write a meal planner and stick to it. It might sound terribly boring, but ensuring that everything you buy is actually going to be used can dramatically reduce your weekly food spend.
And rather than going to the tip when you want to get rid of unwanted belongings, try to flog whatever you can to bring in some extra money. You can either do this through car boot sales, or online auction sites.
Boost your income
If you are still finding it a struggle to make ends meet, then look at ways you can boost your income.
If you've got a spare room that you aren't using, why not consider letting it out to bring in a bit of extra cash? Under the government's Rent a Room relief, you can bring in up to £4,250 a year from renting out your spare room tax-free. You can take advantage of the scheme whether you rent or own your home, although if renting you will need to check whether your lease allows a lodger.
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