How to save money and use money wisely

Using your money wisely

Are you constantly finding it difficult to make ends meet?

Do you find it difficult to afford those extra little luxuries we all desire?

Perhaps all you need is some simple helpful advice on how to control your spending and focus on ways to save money by cutting down on uneccesary expenditure and not throwing it away on things you don’t need.

You can manage and save your money more efficiently by planning and sticking to a weekly budget. Keep a strict account of all your bills and put money aside for essential items such as food, mortgage, telephone bills, electricity, gas, car running costs, holiday savings, meals out and other unavoidable expenses. Save any loose change you have in a jar. It’s surprising how quickly it mounts up and comes in useful for buying presents and any other occasional expenses that you may not have planned for.

Avoid keeping too much money in your cheque account. Use it mainly for paying regular bills, not for saving money. That’s what a bank or building society savings account is for. So any excess money in your cheque account should be transferred to a savings account on a regular basis. Preferably one that offers the highest interest rate.

For longer term savings consider opening a mini cash ISA account with a building society. Shop around for the best interest rate. Currently you can save up to £3000 tax free each tax year with average interest rates hovering around 4 - 5%

Get out of debt

The biggest obstacle to saving money for the things you want in life is being in debt! Always start by paying off your debts first, or in the case of a mortgage, reducing your repayments by finding a better deal.

If credit card debt is your major problem then consider transferring your outstanding balance to another credit card company offering a lower interest rate. There’s a number of credit card companies which are currently offering 0% interest on balance transfers. By comparing rates and transferring your outstanding balance to one that offers the best deal you can save money on the interest you pay each month.

Tip: Make sure you pay off the balance transfer within the time stipulated for the 0% rate. If you’re already with a company that offers these kind of deals, make sure you clear any outstanding balance that accrues interest before transferring from another card.

You can avoid the penalties that credit card companies charge when you forget to pay on time by setting up a direct debit through your bank account to pay a regular monthly sum to your credit card company.

Try to reduce your mortgage payments by shopping around and compare the interest rates between lenders. It’s amazing how many people are content to carry on paying their existing lender when they could be saving themselves hundreds each year, and thousands of pounds over the long term, simply by changing their mortgages. However, keep in mind that your current lender may charge you a redemption penalty if you haven’t had your mortgage very long.

If you’ve been paying a mortgage for a number of years and the value of your home has risen substantially, you may find that the equity in your home is sufficient to consider using it as a means of paying off debts by re-mortgaging. By taking out a higher mortgage you may be able to pay off all existing loans and perhaps invest any extra money you may have in a second property. One that you could rent out and make an income from, or even renovate to sell. Read: How to Make Money from Your Property

If you are uncertain about the pros and cons of investing your money in property then seek out the advice of a recommended financial advisor who can help you with your needs.

Saving money on household bills

By comparing the rates of different suppliers, you can often save a fair amount of money by switching to a different gas and electricity supplier. Take a visit to the u Switch website where you can compare the prices of major suppliers online.

You can reduce heat loss in your home and save on heating bills by following simple measures like draught-proofing the doors and windows. It helps if you close your curtains and blinds at night and close the doors to rooms not being used. This will prevent further heat escaping. Another tip is to place reflective material such as tin foil behind radiators to reflect heat back into the room. Also avoid placing furniture in front of radiators or covering them with clothes or radiator covers.

Do you have cavity wall and loft insulation in your home? If not, then you should seriously think about having it installed. Most of the heat in your home can be lost through the walls and roof. It will save you money in the medium to long term. You may even qualify for a government grant to help you pay for it. Seek advice from your nearest Citizen Advice Bureau.

If you're going away on holiday or for a weekend break and there’s nobody staying at home then don’t forget to turn the water and central heating system off. Even when you’re at home you can save a noticeable amount of money on your heating bills by simply turning the thermostat down a few degrees and setting the boiler to come on only for short periods of time during warm weather. Taking showers instead of baths will also reduce the amount you spend on heating up water.

Use energy saving light bulbs and fluorescent bulbs for lighting to save money on your electricity bill. Only illuminate the areas where you need light instead of lighting the whole room and don’t forget to turn the lights off when you leave the room.

Saving money on telephone bills

Compare your mobile phone tariff with those charged by other suppliers as well as other tariffs that your existing supplier might offer.
You could very easily be paying more than you need to. If you’re regularly receiving expensive monthly charges, but use your mobile phone very little, then consider changing to a 'pay-as-you-go' phone. Also, if you find you’re spending too much money sending lots of text messages then consider using an online service which allows you to send text messages free of charge such as those listed at www.textmefree.com

Some companies offer big savings on international calls by using a special dialling number preceeding the one you’re calling. ‘Just Dial’ is one of these companies who also happen to offer some of the lowest rates available in the UK Click here for more details.

Saving money on groceries

One of the quickest ways to save money is by being more selective when buying groceries.

There’s a number of ways you can do this without sacrificing your natural cravings for the foods you can’t live without.

First of all, consider buying your groceries in bulk. In supermarkets there’s always something on special offer which you can take advantage of by stocking up while the prices are low. The initial outlay in the short term will soon be compensated by the savings you can make over the following weeks or months. And I don’t just mean non-food items like shampoo, toothpaste and other toiletries. You should also stock up on foodstuff which can be stored in the freezer such as bread, frozen foods and other items which can be kept in plastic containers until ready for use.

Look out for the supermarkets own brand of selected items. These are generally a good deal cheaper than leading brands. They may not always taste as good, but often you can’t tell the difference.

Don’t buy the smaller size items when you can make bigger savings on the larger size which will last longer. Check the labels for the volume of contents and compare the value against the smaller items. The savings may be only small but they all add up over a period of time.

Most people like biscuits and chocolates, but snacking on nuts and raisins is cheaper and healthier. And if you eat before you go shopping you won’t be so tempted to add so many of those little ‘extras’ to your shopping cart.

When there’s more than one supermarket in the area where you live then keep a shopping list with columns that compare prices from both stores. Their prices may vary occasionaly but you can see this at a glance and adjust your list accordingly.

Remember to save coupons from magazines and other sources that allow you discounts when you go shopping. The larger Supermarkets often have their own promotional magazines that include coupons. Some have their own petrol stations where you can save points on their loyalty cards which also give you discounts on your shopping bill. The fuel is sometimes cheaper too.

However, supermarkets don’t always offer the best value for money when it comes to farm produce. Consider going directly to a fruit and veg wholesaler or even a market stall for greater savings. Or even the nearest farm where you can buy fresh eggs and other produce.

Another way to save money is to cut down on convenient foods and takeaways as much as possible. It’s amazing how much you’ll save if you make the effort.

Saving money on leisure activities

Are you throwing your money away on things you hardly use?

Memberships to clubs you rarely go to, book clubs and video clubs that send you items you don’t need, cable channels you hardly ever watch.... all these expenes add up quickly.

Walking and jogging to keep fit costs nothing and will keep you just as healthy as going to a gymnasium that charges regular fees.
Using inexpensive ‘free weights’ at home and the right kind of exercises can be just as effective as the expensive machines that your membership fees are paying for.

Perhaps you prefer to work out in the company of others, or need the motivation of a fitness instructor. Well if you’re going to go to the gym regularly then at least compare membership fees to see who offers the best rates.

If you get bored easily consider taking up an inexpensive hobby such as reading. It costs you nothing to join your local library. Some libraries also loan out music cd’s and videos for a lot less than the hire charge of rental shops.

Saving money on holidays

Travel agents always have ‘late deals’ which offer you great savings if you can take a holiday at short notice. You can also find some great deals on teletext. Before booking a holiday through a travel agent check out similar deals that are available on the internet.
You can often get some amazing discounts when shopping online.

Some of the UK travel sites I recommend are Expedia, for package deals, Thompson Flights for low cost flights and ebookers for vehicle rental.

Before travelling abroad shop around for the best deal when changing your money into foreign currency. The rates that travel agents charge for this service can vary quite a bit. It’s adviseable not to carry too much cash though. Travellers cheques are a safer option.

If you travel a lot you could save money on your travel insurance by taking out an annual travel insurance policy instead of paying for insurance each time you go away.

Saving money on motoring expenses

Buying a car is one of the biggest expenses you are likely to incur next to buying a house. So making the right choice on where to buy and how to finance your car is important.

You have a number of options when it comes to buying a car.

If your budget allows, you may prefer to buy from a dealer. This is the most expensive option though. After all, the dealer has to make a profit doesn’t he? But buying from a dealer will give you a far greater amount of legal protection than buying from an auction or buying privately, and thus greater peace of mind. Once again, it pays to shop around and compare prices. If you find the car you want at a dealer then don’t be afraid to push for a lower price or ask for extras to be thrown in.

Another option, which offers the best chance of saving money is to buy through an auction. This can be risky though. You won’t have the same level of legal protection as you do when buying from a dealer. So it`s advisable to read the auction’s terms and conditions, then attend a few sales to get some experience of how the bidding proceeds and what kind of prices you can expect to pay. The best deals usually involve late model cars which come direct from respected companies and are usually well maintained. You can often save hundreds of pounds buying through an auction if you purchase wisely. Whatever you do, don`t be tempted to bid more than the limit you have set yourself. It`s very easy to get carried away in the excitement of the bidding and spend a lot more than you intended to.

Your third option is to buy your car from a private seller. By scouring the motoring ads in your local paper, the autotrader magazine or online website, you may find the right car for you. If you’re careful and follow certain precautions you can usually get a good deal, but take someone with you who knows about cars if your own knowledge of cars is limited. As an extra safety measure, consider getting the Automobile Association to do a full inspection before you buy.

For more comprehensive advice on buying cars in the UK visit www.dvla.gov.uk/vehicles/adviceon.htm

The cheapest way to finance a car purchase is to pay cash. So it’s better to save up your money first if you can. If the car you want is an essential requirement that you can’t wait for, then taking a bank loan is probably your next best option. Some car dealers offer a tempting finance deal with low interest rates, but they may be adding extra money on the price of the car first. Compare the price of similar cars by checking the dealers ads and using the Parkers Guide

When it’s time to take out or renew your motor insurance don’t accept the first quote you’re offered.  Many insurance firms have free phone numbers and are always keen to attract new business. Spend some time ringing around and comparing quotes. You could literally save hundreds of pounds! You can also get favourable quotes online.

Try visiting the following sites for a quotation... MotorQuote Direct

Taking good care of your car and carrying out routine maintenance checks will almost certainly save you money on fuel expenses. For example, have the motor oil and oil filter changed regularly and replace your vehicle’s air filter if dirty. A dirty air filter will affect the air and fuel mixture causing a loss in performance.

Also, check that the recommended tyre pressures are being used. Avoid harsh acceleration and braking when driving and aim to drive at the optimum speed for fuel economy (around 56 mph on higher speed limits) Removing a roofrack from your car when not in use will also give you extra mileage.You will also save money and get healthier at the same time by walking to local places instead of taking the car.

Saving money on buying clothes

Websites that sell clothing can often afford to offer greater savings than bricks and mortar stores because they don’t have the same expensive overheads that running an offline store entails. Whether it’s designer wear, childrens’ clothing, lingerie, ladies fashion wear or mens suits, you can generally find better prices online.

Big discounts can also be found on clothing at designer outlet villages and clothes warehouses or factory shops. Some manufacturers have factory sales which enable you to pick up some fantastic bargains. Keep your eyes open for advertisements in the newspaper or contact the company by phone if you know they promote such events.

The January sales also present a great opportunity to stock up on essential items that could see you through the year.

And of course, if your sewing or knitting skills are not too shabby you can always save money by making your own.

Saving money on furnishing your home

Furnishing your home can be an expensive business, particularly if you’re starting from scratch. My advice is to keep it lean and clean!

You don’t need a lot of furniture to create a stylish home. Too much furniture means less room and more clutter. You may prefer to have lots of shelving, extra cabinets and coffee tables to display your favourite ornaments on, but that just means extra cleaning! Could your time be put to better use?

Decide on a plan of action before going on a shopping spree. How much can you afford to spend? What type of furniture is essential to your needs? Where are you likely to find the best value for money? Are there any companies offering big discounts? Would you consider buying used or ‘slightly marked’ goods?

Don’t forget that lots of firms offer massive discounts during sales, particularly the January sales. And companies that make their own furniture and sell direct to the public can offer good quality merchandise at lower prices than most retail stores.

Before buying a suite consider the quality of materials used in it’s construction. Is the fabric hard-wearing? Can you feel the internal framework through the padding? Does it feel strong enough to stand up to heavy use? Making the right choice at the time of purchase could mean the difference between a long-lasting piece of fine workmanship and a cheap quality product that will lose it’s looks and need replacing within a relatively short period of time.

Ask about payment options. Some companies offer interest free credit over 12 months or less. Not long ago I decided it was time to replace our old bed with a new one. The mattress, which was bought seperately,  was one of those new visco elastic foam ones that offer better support. It was more expensive than most other types but it was more comfortable and I expect it to last longer. By comparing prices and shopping around I found a company that was selling them with interest free credit, and over £120 cheaper than another firm selling the same one at a so-called discounted cash price! So do your homework first, it will be worth it.

If you don’t mind buying used goods, auctions are a great place to find bargains. Items such as dining tables and chairs can often be found at very affordable prices. Electrical items such as televisions and hi-fi’s can also be picked up very cheaply. However, there is a slight risk of them being faulty, so beware! Ideally you need to see them working.

If you’ve never been to an auction before then click here for further advice and tips on buying at an auction

Saving money on business and leisure products

It’s not too difficult to save money on business and leisure items such as computers, electrical goods, photographic equipment, sports goods and lots of other stuff. The online auction site eBay is a good source for most of these things. But you can also find local auctions that sell similar items by looking at the classified advertisements in your local newspaper. The advantage of an offline auction is that you can see the goods up close before you buy.

You can often find auctions devoted to specific lines such as paintings, carpets, electrical goods and three piece suites. But make sure you satisfy yourself to the quality of these goods before you make a purchase.

Sometimes you can get good discounts through retail stores if you are prepeared to haggle a little bit. If you’re buying a number of items from the same store, or paying with cash, don’t be afraid to ask if they will knock a percentage off before you agree to buy.

Computer fairs are a good place to find discounts on computer hardware and software. Parts and peripherals such as hard drives, motherboards, processors, memory, monitors and cases are all easy to come by and it’s easy to compare prices among the dealers who attend. They are also a good place to find computer books and software. If you want to upgrade your PC you can make worthwhile savings by going to the fairs. Alternatively, there’s a few websites that offer reasonably good value for computer stuff.
 
Take a visit to Micro Warehouse or for new and used products try eBay.co.uk and eBay.com

Saving money shopping online

The internet has opened up a whole new shopping experience and is especially useful for comparing the prices of any product you may be thinking of buying. Whether you intend to buy online, where bigger discounts are generally found, or from a store near to where you live, using the internet makes it easy to find the best price available, and the information can be useful as a bargaining tool if you prefer to buy closer to home. Sometimes a local dealer might try to match or even beat the price if you phone around and ask if they can give you a better deal.

Shopping online can be particularly useful for people who are situated a long way from a shopping centre or are housebound for some reason, or simply can’t find the time to go shopping. If you fall into this category click here to compare pices on a wide range of products available from UK merchants.

For more moneysaving tips visit www.moneysavingexpert.com (UK) and www.stretcher.com (USA)

Todays money saving tip....

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