With Christmas and New Year over for one year, many people will be looking to recuperate. Alongside eating better and exercising more, spending less money was one of the top three New Year’s resolutions for 2018 according to a recent survey by YouGov, and we can understand why. The latest news tells the tale of spiralling consumer spending. As a leading recycler of unwanted clothes, we work with people from all walks of life to give them the means to boost their income and relieve the burden of personal debt. However, with UK insolvencies at their highest level since the financial crisis and personal debt rising to £1.6 trillion, households across the UK are still feeling the strain.
The most recent figures regarding the UK’s average household spend are particularly troubling. The average family now has outgoings totalling £554.20 per week. With our impending departure from the European Union just a short time away, this figure is only set to increase due to predicted inflation rises. Enough of the stats however, whatever your expenditure, it is important to realise that there is hope. There are after all numerous ways that you can make extra money – we shared just 50 in this recent blog post on making money for Christmas – but as well as making extra, embracing better money habits is certainly the way forward.
Here we share our top tips for saving money so you can plan your spending accurately and limit the overspending that is unfortunately all too common across UK households.
Monitor your spending
How can you tackle overspending without finding out where you’re spending in the first place? Monitoring your spending and recording associated expenses is a vital starting point, whatever your income. Keep track of expenses over a set period of time, we recommend monitoring your expenditure for between two and four weeks to get a clear idea on each and every transaction, and record everything! That’s right, every coffee, magazine or petrol station snack must be accounted for to get a real handle on where your spending is going wrong. Every penny counts after all, and once the figures are in and your period of recording is over, sit down and categorise each area of expenditure and the amount spent. Your credit card or bank statements may come in handy here.
Keeping track of your spending patterns will certainly be an eye opener, but in the same breath, it isn’t easy. As well as using your statements to double check transactions, making use of the latest tech is a great step towards clarity. There’s an app for literally everything these days so you probably won’t be surprised to hear there’s apps for monitoring spending too. Money Dashboard, You Need a Budget, Goodbudget, Wally, and MoneySuperMarket’s OnTrees are all top rated apps, and with the right use, could in fact save you a fortune. You Need a Budget for example makes a (very) bold claim that app usage saves the average user more than £2,000 in a nine-month period.
Make a budget…
All these useful insights into your spending habits shouldn’t go to waste. Budgeting is the primary method of curbing your expenditure but when it comes to making a budget of your own, setting attainable goals is the key. Even if you are on a low income, budgeting for better spending can save you a lot of hassle and headaches, and could even leave you with a rainy day fund to be proud of.
There are so many reasons why budgeting makes sense. As well as putting a stop to overspending, budgeting will help you prioritise and reach the financial goals that may never have been possible before. Whether your goal is to get out of debt, save for your first home, start your own business or something a little more modest, like putting some money aside for a great family day out or holiday, budgeting gives you the plan you need to get there. Budgeting also puts you in control, and you may be surprised by just how empowering that is. Making a budget can unlock greater flexibility to cover unexpected expenses or to do something you’ve always wanted to do, like an impromptu city break, sky dive or night out. More importantly, budgeting gives you the biggest, and most effective, tool to change your financial future, for the better.
…and stick to it
Making a budget is relatively simple with the right information, but sticking to it is a whole other matter. Sticking to a budget, particularly if it’s for the long term (which we of course highly recommend), requires more than just determination. Changing your spending mentality will certainly help you spend less and save more as your budget intends.
Many people see budgeting as deciding what to do with the money that is left over after you’ve paid your bills and other expenses, which is only a recipe for disaster. Paying yourself first is a method suggested by many financial advisors to change this, often hardwired, mind-set.
Developing your own pay yourself first system is simple and could be a game changer when it comes to managing the budget restrictions that hold many would-be savers back. The process starts with the recording of your savings goals. Itemise each goal being sure to include the monthly amount that you need to set aside to achieve your objective. Remember you don’t have to stick to just one savings goal, be realistic but ambitious. Once you receive your monthly wage, you then subtract each savings goal monthly total from this amount, moving the desired figure into a savings account. The money left is your official wage after you’ve paid yourself. The freedom that many feel with the paying yourself first method is just one of the reasons why it’s so successful. Give it a try and see how you fair!
If you want to opt for a more softly-softly approach, aim to alter your attitude towards budgeting by viewing it as a friend, instead of a foe that’s going to hold you back from month to month. Whilst restrictions will no doubt be painful to accept at first, recognising the long term benefits earlier in your budgeting journey is the key to understanding its value and putting resentful feeling to one side.
Become an extreme couponer
Now we’ve established your spending habits, devised a fitting budget and honed a budget positive mind-set, looking at ways that you can save money on a daily and one-off basis is where further cutbacks can be made. Couponing is one such tactic.
Using coupons isn’t for everyone, but in recent years the news has been filled with success stories about couponers taking on the brands and securing the bargains that crunch down their shopping bills to pennies. Couponing has become a record breaker too with one extreme couponer paying for a £1,200 shop just using vouchers. You don’t have to go this extreme, there are in fact another two ‘breeds’ of couponer out there, including the skilled couponer and casual couponer. Whatever, couponer category you fall into however, coupon savings really do add up to major benefits for you and your family.
The average family spends 10% of their weekly expenditure (£58.00) on food and non-alcoholic drinks. Thanks to the joys of couponing you can bring this weekly total down to a more manageable level. Knowing how to source coupons is the greatest hurdle to overcome but if you know where to look the money saving possibilities are endless. Printable coupons are the most common vouchers available in the UK, and there are websites dedicated to giving you access to these. The following are the best of the bunch:
Keep an eye out when reading your favourite magazines and newspapers for coupons. Free in-store supermarket magazines in particular are packed full of great offers. Signing up to loyalty cards will also give you access to coupons, most of which are delivered through your door every month. Tesco Clubcard, Sainsbury’s Nectar and Boots Advantage card holders seem to get the best coupon perks. If you love reviewing products, you could earn yourself a few coupons and freebies for your valued opinion. Either submit your feedback directly, post your own review on social media, or sign up and send over your thoughts via review websites like BzzAgent and Tesco Home Panels.
Have a good sort out
Spring is almost here so what better time to go ahead with that long overdue clear out. Whilst you may not be sitting on Aladdin’s cave, your home, and more specifically your wardrobe, could be an untapped resource for delivering the extra money you need to increase savings. According to the Office for National Statistics, the average household spends £25.10 per week on clothing and footwear. Whilst our collections accumulate, older, less favoured clothing items become lost in the darkest reaches of your closet. But rest assured, we have the solution for your unwanted clothes, and it could just provide the boost your bank balance needs.
There are many reasons why people sell unwanted clothes online for cash, and here at Genie we’ve seen it all. Making money from used, unwanted clothing however remains the primary drive behind most of our customers’ clear outs. After all, why shouldn’t you cash in on your closet? Our recycling service offers a quick and easy route to cash, and at 50p per kilogram you could make a small fortune if you’re a self-confessed hoarder. As well as giving the best price for unwanted clothes, we make the whole process simple and seamless so you can get paid even faster. Find out more about how our recycling clothes service works or request your free Genie collection pack to get started. You’re just one business day away from cashing in on your spring clean.
If your spring clear out reveals more than just clothes and footwear, then heading to your local car boot or using online marketplaces like eBay and Amazon may be the way to go.
Make household costs more efficient
Maintaining and financing the average family home isn’t easy. There are various necessary expenses that keep your household ticking over, but even if certain areas of expenditure can’t be cut, the price offered shouldn’t always be the price accepted. We may not live in an age where haggling is king, but improving the services and products your household makes use of is important.
Let’s start with your bank account. Switching is simpler than ever thanks to price comparison websites. Swapping your bank account could unlock some pretty impressive bonuses, with banks and building societies paying anything up to £200 to secure your custom. Now to your energy supplier, the same comparison websites that helped you find a better banking deal will assist you here. Some UK households could save in excess of £400 annually by simply switching energy suppliers. Your mortgage rates could also be worth tweaking. With the impending Brexit, many mortgage and financial advisors are advising clients to fix now, and for as long as possible. Fixing your mortgage will not only reduce monthly costs, it will protect you from the unknown, making it easier to manage household expenditure as the economy adjusts.
While there aren’t many household expenses that can be scrapped completely, your TV licence may be one thing you could do without. At £145.50 per year, ditching your TV and watching Channel 4, ITV and Channel 5 catch up services could save you money. Online streaming services, i.e. Netflix and Amazon Prime, are officially changing how we watch our favourite shows and films, so why pay the price if you’re not a fan of BBC channels?
Travel was officially the biggest area of expenditure for UK households, with families spending £79.70 of their £554.20 monthly budget every month on transport. Car sharing websites offer a great way to cut travel costs, particularly for those travelling long distances on a regular basis.
So, we’ve covered just a few of the ways you can save money, but we’d love to hear about the money saving hacks you rely on. Tell us more about how you save money by tweeting, Facebooking or Instagramming us today!