How to: Cut spending and save money

How to: Cut spending and save money

HOW TO: CUT SPENDING AND SAVE MONEY

No matter who you are, retail therapy can feel like a great ailment for life’s problems. Unfortunately, it just doesn’t help our wallets. Use our guide to cut spending and save some cash.

Living Beyond Your Means

Spending more than you earn is a step in the wrong direction when it comes to taking control of your finances. If you’re blindly spending without thinking, get a clear-cut overview of your money with our budget planner.

Don’t Borrow More

Paying off debt with a different loan can be beneficial sometimes (check out Debt Consolidation Loans ) but if you’re fixing old debts with expensive or longer term debt, you’re just extending the debt cycle. It sounds obvious but the more you borrow, the more interest you’ll end up paying so think about this before you apply for more credit.

Borrowing to pay off debt is not a good idea as you’ll find yourself falling into a “debt cycle”. However if you have multiple debts you may be able to consolidate them into one monthly payment with a debt consolidation loan. Not only can this make it easier to manage your repayments but you can often save money on the interest.
If you are struggling with debt, find out where you can get help with our guide or call the Money Advice Service at 0800 138 7777.

Prioritise Your Purchases

Now there are essentials, like council tax and household bills, that we have to pay. But sometimes, we prioritise our money for things we want rather than what we need.

We’re not suggesting you cut out everything you love in life to free up cash each month but if you're short on cash, you may need to make sacrifices. Jot down a list of luxuries you buy each month like monthly entertainment subscriptions, nights out or takeaways.

Then group them into two categories; luxuries you couldn’t live without and luxuries you could easily give up. Stop purchasing the things you could give up for a month and see how much you save. Still allow yourself some some luxuries each month, just not as many!

If you want to buy something new, think about how much of your income it would take up. For example, if you’ve get £50 everyday and want a new pair of £40 trainers, that's almost a day’s budget for something you might not need!

Make Swaps

If you can’t bare to part with some of your purchases, think about swapping them with cheaper alternatives. For example, lottery and scratch cards can be good fun but very expensive! Try using free lottery sites, like Pick My Postcode and you could win up to £2,000. Even if you don’t win, you’ll be saving money!

If you’ve been using an expensive beauty product for the past few years that you just can’t let go, now might be the time to try new. Go into your local health and beauty store and ask for some advice on the best product for you at the best price.

Make a Monthly Budget - and stick to it!

The idea is simple; make a budget each month and do not overspend. In reality though, this can be easier said than done. Budgets make you more aware of your spending, so if you do overspend at least you’re aware of it and can cut back in other places for that month.

Get started on your Take Control journey with the Choose Wisely Budget Planner.

Write shopping lists for your food shop and stick to it. Avoid shopping when you’re hungry, visiting the aisles you don’t need or falling victim to ‘bargains’. Discover more tips in our guide on cutting your food shop bill.

Find the Best Deal

Unfortunately, in this day and age, there is a high price to pay for convenience. The less time you spend looking for something, the more you could end up paying. Search the internet for the best price on clothes, DVDs, tech, etc to make sure you’re getting the best deal.

Search for coupon codes online and earn cashback for your spending. When you have to spend, aim to save as much money as possible!

Not Enough?

If you’ve used our budget planner and there are areas where think you need to cut back on spending, take a look at our more detailed guides:

How to cut down:

Final Word

It can be difficult to cut back on the things you enjoy in life but by understanding where your money goes, you can stay in control of your finances. Staying on top of your spending and avoiding the worry when you hit financial emergencies can mean a huge improvement on your wellbeing.

USE OUR BUDGET PLANNER

Get started on your Take Control journey.