When we are looking to either build up our savings or pay down debt, we need to do a complete financial audit of our spending. This means going through the monthly bank statements, and finding those expenses which are non-essential which we can cancel, or reduce the spend on those necessary expenses.
With this article, we will be going through the top ten common places which you can look to, in order to reduce your spending each month!
1) Stop Buying Bottled Water!
This one frustrates me the most, because your typical 500ml bottle of water in the supermarket can cost in excess of £1.
We are notorious for complaining about how expensive petrol is (currently around £1.20 per litre, or 60p per 500ml), but we are wasting away our earnings by buying water at a price that is more expensive than petrol per ml!
We are very lucky in the United Kingdom to have tap water that is safe to drink, and costs as little as 1p per 5 litres!
That means your supermarket water is costing you 500x the price.
Get yourself a good quality reusable water bottle, and save pounds each month, while reducing the plastic you throw away at the same time.
Savings per Month: £15
2) Subscription TV (including Sky)
Entertainment package prices are getting ridiculous.
The packages available with Sky TV range from £20pm for the basic package, to £78pm for all channels, but typically take up a lot of your time as you sit there browsing through the channels, trying to find something which helps you justify the cost.
The best thing you can do is invest in a Freeview box, or a Digital Antenna which can get you access to the basic list of channels (which should be sufficient).
If you are missing your main sports events, you can also purchase passes through Now TV which means you are more likely to watch only the events that interest you most, while saving more pounds in your pocket.
Savings per Month: £50
3) Assess Gym Memberships
Your average gym membership in the UK costs £17 pm outside London and £25 pm in London, and the average gym-goer spent £600 on memberships for around 14 trips in that time (a whopping £43 PER VISIT).
While I strongly believe in keeping expenses which look to improve your health and wellbeing, there are many alternatives to a costly bill each month.
Buy yourself a pair of shoes and go for a run, buy yourself a bike and have a healthier commute, or join a walking group and travel to places you have never been for cardio.
For strength training, there are many bodyweight exercises that can help you strengthen quickly, even without barbells, dumbbells or machines.
Push-ups for chest and triceps, planks for core, squats for legs, and pull-ups for your back are all exercises that use your bodyweight to the same effect, and the compound nature of the exercises can be better than the isolating exercises of your local gym.
You can find free exercise equipment in many parks that have been installed by the council, or you can even take advantage of free group exercise sessions run by companies such as OurParks in London.
Savings per Month: £25
4) Change your Phone Bill
This is something that I have been aiming for recently. My phone bill is currently £53pm (including an employee discount), and is high because of the data I purchased each month as a way to minimise the likelihood of overuse charges.
The 30gb allowance I have is always too much, and I could call Vodafone to change my tariff to one with less data and pay £10pm less (or £120 each year!)
Furthermore, my contract is due to end in June, but at this point, I will be looking for sim only deals.
At the minutes, texts and data I currently use, this means I can get a deal for £20pm through O2, with a 20% employee discount (or £16pm).
That is a total £37pm saving.
Check your usage, and your options, because there could be large savings realised.
Savings per Month: £37
5) Sell your Car
In the UK, the average cost of a car including petrol, road tax, insurance and maintenance costs is over £13,000 a year. That is £1,100 a month!
Firstly, you should really check whether you really need a car. If it is a major part of your commute, and you do need a car, look into leasing which includes insurance and maintenance all in a single fixed fee (with the variable cost being the petrol).
If leasing isn’t for you, then try to make sure the next car you buy is bought outright, rather than take potentially expensive financing with a monthly payment.
If you have a shorter commute, look at alternative travel arrangements, such as buses, trains, tubes, or even by buying a bicycle (mentioned above). You could be healthier, and save money simultaneously.
Savings per Month: £500
6) Prepare More Food and Drink at Home
Eating out at restaurants, buying expensive lunches at work, grabbing your daily latte, and ordering takeaways can cut down your disposable income rapidly.
The total spend in the UK on eating and drinking each year was £49bn in 2018 (or £800 per person).
By buying fresh ingredients at the grocer, and butcher, you can make a fantastic, fresh and organic meal that costs much less than you would spend on a takeaway, or a restaurant.
Grab a thermos flask and fill it with your preferred hot drink at home, which can save your £3 a day drink habit.
Also take the time to prepare your lunch before you head to the workplace, instead of buying that bespoke salad and drink that costs potentially £10 a day.
The savings here can be substantial.
Savings per Month: £90
7) Downsize your Flat/Home
Are you home rich, but cash poor?
Humans are ambitious by nature, and one of the main measuring sticks for success was typically the home: a bigger home meant a more successful person.
Despite this, you could be paying too much on your home considering the amount of space you truly need.
If you own a 4 bedroom detached house in the UK, and you are a couple with one child that just use two bedrooms, you could downsize your home to one that better suits your requirements.
Let’s say you sell your 4 bedroom detached home for £600,000, and buy a 2 bedroom semi-detached home instead for £350,000, then on a 25 year mortgage with 10% deposit, and 2% Fixed APR, then you would be saving £2,289 – £1,335 = £954pm.
Of course this situation would not be so common, but even reducing the size of your rented house/flat or moving in with a roommate can save a significant amount each month.
Savings per Month: £250
8) Stop Buying Branded Medicine
In a similar context to the first point about bottled water being overpriced, the same applies to medicine.
Paracetamol, also known as Acetaminophen, is available in generic brand boxes for as little as 15p.
The chemical which makes it work is the same whether you buy the generic brand, or those available from companies such as Panadol (£4.19), or Nuromol (£7.39).
The same applies to all other medicines.
Find out the active ingredient that you need, and find this in the generic brands on offer to make sure your pocket doesn’t suffer while you do.
Savings per Month: £10
9) Dry Your Clothes Naturally
The average cost to dry one load of clothes in the UK is 50p, which when extrapolated to a full year where you dry your clothes three times a week, is £75.
While this doesn’t seem like much, it is still £75 more that you could have each year than you would otherwise have.
Buy yourself a clothing rack to hang your clothes up after each wash, and your clothes will last longer too as you aren’t introducing so much heat to them.
Savings per Month: £8
10) Choose Free Alternative Trips
The final area to cut spending is to try and take advantage of the many potential free trips available to you.
If you find yourself bored at the weekend, rather than deciding to shell out £49 per ticket for Thorpe Park, or £25 to go to London Zoo, go to each of the major national museums that offer free entry.
Get your walking shoes on and go for a walk through nature, and bring some lunch with you for some adventure.
Take a Frisbee, or a ball, and get some fresh air at no extra expense!
It is easy to just spend when you’re bored, so with a little pre-planning, you can find free alternatives which can be as good as, or even better than the costly alternatives.
Savings per Month: £100