With the increasing cost of living, it’s more important than ever to know the best ways to save money in 2023. We’re here to help become a savvy saver this year with our ranked list of ways to save money and reach your financial goals.
How to Save Money Contents
1
Pay Yourself First (Automate Your Savings)
You can’t save money if you don’t have the money (obviously). The best time to save money is when you get paid, so after you’ve worked out your savings goal (which is discussed next), make sure to transfer that amount into a savings account so you can see what you have remaining for your needs (bills) and wants (fun stuff). Alternatively, you can set up a direct debit each month so you don’t forget to add to your savings each month.
If you’re just starting out, we recommend using an instant-access savings account. This is just in case you have underestimated your outgoings or if you have an unexpected bill. We’d always recommend having an emergency fund of at least 3 to 6 months of your outgoings. This is to cover you in case you lose your job or need to pay off a large bill.
If you’re just starting out, we recommend using an instant-access savings account. This is just in case you have underestimated your outgoings or if you have an unexpected bill. We’d always recommend having an emergency fund of at least 3 to 6 months of your outgoings. This is to cover you in case you lose your job or need to pay off a large bill.
2
Set Yourself A Goal and Budget
“You can’t manage what you can’t measure” – Peter Drucker.
“To be able to successfully save more money, you need to be able to measure your success” – Saveezy
Set aside an hour one evening to deep dive into your expenses. To start, we recommend pulling up your 3 most recent bank statements and filling a spreadsheet with your reoccurring expenses. If you have any one-off expenses, categorise these (e.g. eating out, clothes, transport) and add them to your expenses. Once you have your list of outgoings, categorise these as needs (unavoidable bills) or wants (leisure activities). You should also add up your earnings for each month.
Now you know your 3-month average incomings and outgoings, you can set a percentage savings goal. A common technique is the 50/30/20 rule where 50% of your earnings go towards your needs, 30% goes towards your wants and the remaining 20% is saved each month. Find what works for you and make adjustments each month to find the right balance.
“To be able to successfully save more money, you need to be able to measure your success” – Saveezy
Set aside an hour one evening to deep dive into your expenses. To start, we recommend pulling up your 3 most recent bank statements and filling a spreadsheet with your reoccurring expenses. If you have any one-off expenses, categorise these (e.g. eating out, clothes, transport) and add them to your expenses. Once you have your list of outgoings, categorise these as needs (unavoidable bills) or wants (leisure activities). You should also add up your earnings for each month.
Now you know your 3-month average incomings and outgoings, you can set a percentage savings goal. A common technique is the 50/30/20 rule where 50% of your earnings go towards your needs, 30% goes towards your wants and the remaining 20% is saved each month. Find what works for you and make adjustments each month to find the right balance.
3
Use A High-Interest Savings Account
Currently, interest rates set by the Bank of England are higher than they’ve been for decades, making it a great time to receive interest earnings on your savings. We’ve seen some banks offer a 7% regular savings account from First Direct which is a great return on any cash you have sitting in the bank. We’d recommend the minimum you’re looking to get from your bank is a 3% instant access savings account.
Be sure to read the fine print as some banks will only give you a higher interest rate if you make no withdrawals with a fixed term and don’t exceed a certain disposit limit.
Be sure to read the fine print as some banks will only give you a higher interest rate if you make no withdrawals with a fixed term and don’t exceed a certain disposit limit.
4
Negotiate Your Bills or Switch Provider
If you’re at the end of your fixed-term contract, make sure to ring your provider to see if you can get a better deal and save money. We will discuss Gas, Electric and Mortgage providers in another post, but we’d recommend keeping up to date to see if it’s better to even be on a fixed contract with these services (we don’t think so at the moment). The top areas to make savings are your broadband, phone contract and insurance. When negotiating your bills it’s worth:
– Knowing the best deal on the market
– Getting through to the ‘retentions team’ where they have access to loyal customer offers.
– Being polite and friendly
– Knowing what you want from the supplier (cost/performance)
– Asking for more (you don’t ask, you don’t get)
– Using the phrase “I’ll need to confirm with my [insert relationship here]” if you need to hang up to think about it.
Make use of comparison websites like Compare the Market, Confused.com and Go Compare to see where you can make any savings.
– Knowing the best deal on the market
– Getting through to the ‘retentions team’ where they have access to loyal customer offers.
– Being polite and friendly
– Knowing what you want from the supplier (cost/performance)
– Asking for more (you don’t ask, you don’t get)
– Using the phrase “I’ll need to confirm with my [insert relationship here]” if you need to hang up to think about it.
Make use of comparison websites like Compare the Market, Confused.com and Go Compare to see where you can make any savings.
5
Buy From Auction
This may sound strange, but we’ve recently really got into buying at auction. You may think eBay is the go-to place to bid on items, but there’s more out there. There will be a local auction house in your nearest city or town which you can browse for bargains or try our favourite website, John Pye.
John Pye has many auction houses around the UK which you can visit, but you’re also able to bid online and have the items shipped to your home. They sell a mixture of items including electronics, furniture, fashion goods, cars and even houses. The auction items come from a variety of places such as unwanted customer returns, police seizures and business insolvencies. It’s a great way to grab a bargain or even make money by buying items in bulk and selling the excess to make a profit. It’s important to know John Pye will charge a 25% service fee, 20% VAT and potentially a shipping fee, so get your numbers right before bidding.
John Pye has many auction houses around the UK which you can visit, but you’re also able to bid online and have the items shipped to your home. They sell a mixture of items including electronics, furniture, fashion goods, cars and even houses. The auction items come from a variety of places such as unwanted customer returns, police seizures and business insolvencies. It’s a great way to grab a bargain or even make money by buying items in bulk and selling the excess to make a profit. It’s important to know John Pye will charge a 25% service fee, 20% VAT and potentially a shipping fee, so get your numbers right before bidding.
6
Let Someone Negotiate Your Bills
There are services on the web which will do the hard work for you. They will switch providers automatically to make sure you’re always on the best deals. Be aware that they won’t be doing this for free, but if you don’t have time to negotiate it’s better than being on an expensive rolling contract.
Companies like Look After My Bills, Switchd and USwitch are great places to start.
Companies like Look After My Bills, Switchd and USwitch are great places to start.
7
Use 0% Balance Transfer
If you have credit card debt, it’s always best to pay it off as soon as possible to avoid high-interest repayments. However, if aren’t able to pay it off in one lump sum, then transfer your debt to a 0% balance transfer credit card. You may be charged a small fee to transfer your debt, but it’ll be worthwhile to receive 2+ years of 0% interest on your debt. This will give you more time and available cash to pay off the debt, instead of paying the interest owed (which is a waste!)
Make sure to read the fine print and understand the costs associated with each balance transfer card provider. You can find a great comparison of providers on Moneyfacts Compare.
Make sure to read the fine print and understand the costs associated with each balance transfer card provider. You can find a great comparison of providers on Moneyfacts Compare.
8
Earn Cashback When You Shop
Earning cash back can really add up over time if you do it right. Use websites such as Quidco, Topcashback and Honey to get cash or rewards for shopping. You can also use credit cards which offer cashback on spending. We personally love American Express for the cashback rewards but check out more on comparison websites.
9
Get a Free Overdraft
If you happen to need a little extra at the end of the month, don’t pay for high-interest overdrafts or loans and instead secure an overdraft limit with your bank. Use a comparison or check your current bank’s website to see if you could arrange a 0% interest overdraft to help you get through the tighter months.
It’s important not to be reliant on an overdraft and to pay it off before the fixed term states or you may have to pay interest on the loan.
It’s important not to be reliant on an overdraft and to pay it off before the fixed term states or you may have to pay interest on the loan.
10
Use Coupons and Vouchers
Take advantage of coupons when you’re doing your shopping. This can be automated when using a service such as Honey which will automatically scan the internet to find any discount codes and save money. Simply download it onto your Google Chrome Extensions (or another platform) and let it save you money.
It’s always a good idea to sign up for a website’s newsletter before making a medium-large purchase. In most cases, a company will send you a series of marketing emails with increasing levels of discounts. An example of this may be as followed:
– 1 day after signing up for the newsletter: “Here’s our best deals…”
– 3 days after signing up for the newsletter: “We’re giving you 10% off…”
– 5 days after signing up for the newsletter: “Last chance! 20% off today!”
We can’t guarantee this will be the case, but if you’re happy to wait, they’ll soon send you an offer.
It’s always a good idea to sign up for a website’s newsletter before making a medium-large purchase. In most cases, a company will send you a series of marketing emails with increasing levels of discounts. An example of this may be as followed:
– 1 day after signing up for the newsletter: “Here’s our best deals…”
– 3 days after signing up for the newsletter: “We’re giving you 10% off…”
– 5 days after signing up for the newsletter: “Last chance! 20% off today!”
We can’t guarantee this will be the case, but if you’re happy to wait, they’ll soon send you an offer.
11
Improve Your Credit Score
Your credit score will determine your ability to access loans and determine the rate you will receive. Therefore, keeping a good credit score is vital for securing an affordable rate on your mortgage, credit card, personal loan, utility provider, insurance policy, phone bill, car finance, etc.
It’s important to check your credit score regularly and take any recommendations provided to improve your score. You can use websites such as Experian, Equifax, Credit Karma, and ClearScrore to receive a credit report and understand ways to improve your score.
There may be mistakes in your report or fraudulent activity of which you may be unaware, it’s super important to report these and so you can clear them from your credit report immediately.
Good credit score practices include:
– Paying your bills on time.
– Not opening many credit accounts in a short period of time.
– Being on the electoral roll (signing up to vote).
– Having your address up to date.
– Not being linked with someone else on a loan product (they might wreck your score!).
– Reducing the number of ‘hard search’ credit applications.
– Having at least some credit history.
– Limit payday loans
It’s important to check your credit score regularly and take any recommendations provided to improve your score. You can use websites such as Experian, Equifax, Credit Karma, and ClearScrore to receive a credit report and understand ways to improve your score.
There may be mistakes in your report or fraudulent activity of which you may be unaware, it’s super important to report these and so you can clear them from your credit report immediately.
Good credit score practices include:
– Paying your bills on time.
– Not opening many credit accounts in a short period of time.
– Being on the electoral roll (signing up to vote).
– Having your address up to date.
– Not being linked with someone else on a loan product (they might wreck your score!).
– Reducing the number of ‘hard search’ credit applications.
– Having at least some credit history.
– Limit payday loans
12
Pay off Debt
There’s never a better feeling to finally wipe off debt and stop having to worry about it again. If you’ve consolidated your outgoings and managed to find some extra cash, or maybe you’ve found a side hustle, it’s a great idea to use it to pay off your loans. But what’s the best way to start repaying?
We like the debt snowball method which is a simple and motivating way to start writing off your loans one by one.
1. List all of your outstanding debts from smallest to largest
2. Pay the minimum repayments on all your debts except for the smallest loan amount.
3. Increase the repayments to your maximum on your smallest loan.
4. Once it’s paid off, repeat the process on your next smallest loan amount.
We like the debt snowball method which is a simple and motivating way to start writing off your loans one by one.
1. List all of your outstanding debts from smallest to largest
2. Pay the minimum repayments on all your debts except for the smallest loan amount.
3. Increase the repayments to your maximum on your smallest loan.
4. Once it’s paid off, repeat the process on your next smallest loan amount.
13
Cancel Underutilised Subscriptions
Do you really need 4 ways to watch TV? 3 ways to listen to music and have cheese delivered to your door? Probably not. Brits spend around £620 (source: Barclaycard) per year on subscriptions, with around half of the people saying they picked it up using an introductory promotional offer. Crackdown on old memberships and subscription boxes which you may have now exceeded the initial cheap offer period.
If you haven’t used it this month, ditch it. If you find you want to go back, they’ll be more than happy to have you. See if you can survive a month without the subscription and you’ll thank yourself later with a holiday’s worth of savings.
If you haven’t used it this month, ditch it. If you find you want to go back, they’ll be more than happy to have you. See if you can survive a month without the subscription and you’ll thank yourself later with a holiday’s worth of savings.
14
Ditch the Brands
We may love our tried and tested branded goods, but you can save money by buying generic items from your supermarket. There’s often no need to buy branded items when it comes to your food staples and they will likely come from the same factory but for a fraction of the price. Try shopping at places like Aldi or Lidl to find like-for-like brand replacements and save a big chunk on your weekly shop.
15
Reduce Your Energy Costs
Energy costs are at an all-time high so it’s worth doing a full energy review on your home. Check your gas, electric and water bills to see if there are any alarming increases in use and try to cut down where you can. You may have a water leak or inefficient non-LED lightbulbs.
As a minimum, we can all:
– Make sure to always turn off unused lights
– Have a programmed thermostat
– Only run fully filled appliances
– Unplug devices which may be drawing unnecessary power
– Lower your hot water and radiator temperature (approximately 60 degrees celsius)
– Draftproof your doors
As a minimum, we can all:
– Make sure to always turn off unused lights
– Have a programmed thermostat
– Only run fully filled appliances
– Unplug devices which may be drawing unnecessary power
– Lower your hot water and radiator temperature (approximately 60 degrees celsius)
– Draftproof your doors
16
Cook At Home
Cooking fresh food from home is a skill that will benefit you for life. Firstly, you’ll be eating fewer unprocessed foods and more nutrient-rich meals which will keep you better off in terms of mind, body and money (fewer sick days and medical bills). Also, cooking from scratch is often much cheaper than eating out. You can batch-cook meals, freeze them and eat them for days for very little.
It’s a hard shift if you’re not used to cooking, but we’d recommend mastering one or two of your favourite recipes and then you can explore by changing up a few core ingredients. You’ll soon find that a lot of cuisines have the same core techniques which you can adapt for yourself for you can make meals quickly and cheaply with whatever you have lying around.
It’s a hard shift if you’re not used to cooking, but we’d recommend mastering one or two of your favourite recipes and then you can explore by changing up a few core ingredients. You’ll soon find that a lot of cuisines have the same core techniques which you can adapt for yourself for you can make meals quickly and cheaply with whatever you have lying around.
17
Become a DIY’er
If it’s too expensive, do It yourself. We live in a world where you’re never a few clicks away from a detailed instructional guide on how to do just about anything. Since buying a few properties, we’ve become amateur carpenters, plumbers, electricians and decorators; all learned through YouTube. Make sure you’re fully comfortable with any project you take on and have the authority to do the work, but most minor work tasks at home can be done by someone with basic tools and a can-do attitude.
We recommend starting small, borrowing some tools and having someone with a little experience over to help with your first few projects. It’s also a great idea to get at least 3 quotes from professionals so you know how much it might cost (if you can’t do it) and you also get a feel for how a pro would tackle the job (free guidance!)
We recommend starting small, borrowing some tools and having someone with a little experience over to help with your first few projects. It’s also a great idea to get at least 3 quotes from professionals so you know how much it might cost (if you can’t do it) and you also get a feel for how a pro would tackle the job (free guidance!)
18
Reduce Your Grocery Costs
We’ve stopped wasting time running around the busy supermarket by opting for supermarket deliveries for our core weekly shop. We plan out for meals each week and have only what we need delivered to our door (for barely any extra cost). Shopping online allows you to better see all the offers available and easily compare different items. You can also save your favourite items for a quick order and earn points for buying them.
We currently love using ASDA due to their affordable own branded range as well as their recipe section where you can pick a meal and all the ingredients are automatically added to your basket.
We currently love using ASDA due to their affordable own branded range as well as their recipe section where you can pick a meal and all the ingredients are automatically added to your basket.
How to Save Money: Start Now!
We hope you enjoyed reading this list as much as we did making it! Saving money is all about slowly building up habits to be more money mindful and implementing small improvements over time. Once you’ve become aware of where you need to make the changes, you’ll start to automatically make the changes without thinking about it.
It’s usually very taunting to start but we also recommend first figuring out where you stand right now. Start to measure and monitor your spending and you’ll become aware of your current habits and where you might be able to create improvements.
If you’re interested in building more streams of income, try our 23 Ways to Make Money.
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