The number one way of improving your financial situation, hands down, is to bring more money in. The reason this is so powerful is that there is no cap on how much more income you can generate. It’s literally limitless in potential. Most people are still chasing income, so the next best thing you can do is save money by reducing what you spend.
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” — James W. Frick
But if you want to get there sooner, are busting your way out of consumer debt or just need some financial breathing space and fast, then cutting costs in these 9 areas will get you to that end goal quicker.
These may seem like fun things and we don’t want to be kill-joys, but if you have a financial goal then you have to be relentless in its pursuit. Once you’re rolling in cash, if that’s your thing, they can be re-introduced later down the line. However, you may just find there are other surprising benefits.
The lottery has been described as a tax on the poor. Whether you agree with this or not, it IS a luxury. The odds of are winning are almost infinitesimally small, estimated at 45 million to one! In fact, you are more likely to win an Oscar than win the lottery.
In fact when we say ‘playing the lottery’, what we really mean is all gambling, including the on-line bookies, scratch cards and spread betting etc. Remember; the House always wins in the end.
It’s now official: according to Quartz, no one cooks anymore! Now, this may be a bit of an exaggeration and based on US stats, but the numbers show that we now spend more money on eating out than we do on our food shopping.
Eating out is something I love to do now. But when I was staring down the barrel of scary consumer debt, it was one of the first things I cut back on in order to save money and get back on track. Once I was honest with myself, I realised what I was spending on eating out and takeaways just wasn’t sustainable.
Eventually, as I was getting back on track, we would start eating out again, but always on ‘specials’ nights such as ‘2 for 1 Tuesdays’ or ‘early-bird menus’. Or we used to have just a main course, or eat dinner at home and go out just for dessert.
Coffee to go
I hate being the guy that writes ‘you shouldn’t be buying coffee’. But the truth is, getting your caffeine fix can be an expensive habit.
All those skinny hamster-milk, caramel-banana-avocado lattes take a toll on your bank balance.
One £4 coffee each working day adds up to over £1,000 over the course of a year. Just by taking your own coffee in the morning can be like giving yourself a pay-rise.
When I got on board with this as part of my debt-busting strategy, I started using the highly rated AreoPress and a thermos flask to make the perfect homebrew, then laugh in the face of Costa on the way to work.
Many of us like a glass of vino in the evening or a G&T after a hard day in the office. We’ve earnt it, right?
In fact, the average 18-35-year-old brit goes out twice a week and budgets £50 a night. That’s £5,200 over the course of a year. The bad news is that 78% of us exceed this budget!
And on top of the cost of the liquor, think of that indirect saving from not eating rubbish or buying crap we don’t need on eBay or Amazon!
Even reducing the amount we spend on ‘mothers ruin’ just a little can save money and have a positive impact on our finances and our health.
Cars on Finance
I know this is going to be controversial. But the reality is most of us go beyond our means when getting a car on finance. It’s just so easy and those crafty salespeople make it appear so cheap!
Remember, BMW and their ilk have a vested interest in making it cheap to get us into a 1 series because we’re more likely to stay brand loyal and ‘work our way up’ to a 2, 3 or 5 series in future.
Blue BMW Car If you’re going to finance a car, be realistic about what you can afford. It is usually one of the second largest financial commitments after your home. Anything costing more than 20% of your monthly paycheck should be reviewed. The lower the cost the better.
If you really want something bigger and better on finance (we would argue there are better ways to buy a car), then make that a goal once you’ve hit your original objective, such as getting out of debt.
Not sure if you can afford a certain car? Check out this Car Cost Calculator from the Money Advice Service.
Cut the (TV) cord
We’re talking about the full Sky TV or Virgin Media packages here. They can burn crazy money, like over £100 per month.
I’ve had the ‘full packages’ and I literally watched about 4 channels regularly. Once I cancelled them, I didn’t even notice. My ‘viewing experience’ didn’t change one little bit.
Many people now solely use internet-based services like NowTV, Netflix, Amazon Prime or YouTube.
You’d be amazed at the people we hear from that are struggling financially yet often have two or more of these!
If you love your TV package, then at the very minimum call your provider and renegotiate. There are always deals going and sometimes the savings can be up to 50%.
Stick a date in your calendar and do the same thing again when your contract term is nearly up so you don’t automatically renew without having the chance to negotiate.
Each time you buy a branded item, you are usually just paying for marketing and advertising.
A pharmacist friend once told me to check the back of the packet of a well-known brand of ibuprofen vs ‘store own’. They were exactly the same, but with a 600% difference in price!
Often, picking the ‘own brand’ makes no difference to your dining experience and this is one of the main reasons the ‘discounter’ brands such as Lidl and Aldi are doing so well.
In fact, sometimes the branded products and the ‘stores own’ are made in exactly the same factory
Making this change over the course of a monthly shop can save money and make a huge difference.
Let’s make one thing clear though, once I had my consumer debt situation under control, Heinz baked beans were the first thing to work their way back into the pantry. Some things are just better.
The average Brit spends around £1,000 per year on clothes according to a recent survey. That is over 65% more than our suave, chic French counterparts, and they still look good!
Using a bank account such as Monzo that allows you to track that spending habits can help with setting a clothing allowance in the ‘budgeting’ section.
I know when I last cleared out my wardrobe that Pareto’s Law stood true. I was wearing 20% of my clothes 80% of the time. We’ve introduced a rule in our house now: if it’s not been worn in the last year, then it goes to charity or is sold on eBay. It feels harsh at the time, but the extra space and reduced decision fatigue are kinda nice.
Save Money by planning your meals in advance and batch cooking can really help to reduce food wastage. This could include planning and preparing lunches so you don’t run off to Tesco’s and spend £20 on snacks (that one was definitely me!).
A well organised weekly food plan can save hundreds of pounds and also reduce the stress around deciding what to eat and who cooks. I know those annoying programmes on TV with patronising presenters are cringy, but they do have a point.
Still struggling to cut your costs? Check out our article on how to budget like a pro, this is the method I have used for the last few years and it has made my finances so much easier to manage and best of all I feel richer! Alternatively, check out our financial fitness guide to give your finances a total money makeover and change your relationship with money for good.
Let us know – what do you do?
You don’t have to cut all of these things in one go. Taking a temporary break from just a few of them can have a dramatic effect on your budget.
In fact, many of them have secondary benefits that creep in overtime which end up being more powerful and long-lasting. I found that I became less materialistic, enjoyed having less clutter around the house and became more healthy.
What has had the biggest impact on your budget? In what ways did you save money? How did it move you towards your goal? Drop a comment and let us know!
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EatSleepMoney.co.uk does notoffer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. Investments may go up as well as down and you may get back less than you put in.
I'm obsessed with money...just in a good way. Having cleared £30,000 of consumer debt within three years, I learnt a tonne of lessons along the way.
One of the biggest was how important our 'money mindset' and relationship with money is in achieving our goals.
If I can help just one person get out of debt and live a better life, then this has all been worth it.