2016 is a big year for budgeting – for people all over the country, new year’s resolutions this year focused on cutting costs and getting finances in order. Whether you’re reducing your costs to stay within your income or looking to put aside cash to save, with a few simple lifestyle changes and these great budgeting ideas you can boost your financial power for 2016.
Don’t waste your money – specifically, look for ways that you might be paying extra for something that makes no difference. For example, many of us are prepared to pay more for an extended warranty on goods we buy but most of our rights are already covered by consumer legislation, the manufacturer guarantee and contents insurance. The Daily Mail recently reported that in the UK we are paying up to £1billion a year for warranties that could turn out to be useless – most extended warranties add around a fifth to the price. Similarly, if you’re auto-renewing insurance every year then don’t – you’ll pay much less by shopping around as auto renewal quotes are always high.
Add to your budget with household changes – in the UK we have a big problem with food waste, throwing out 7 million tonnes of food and drink every year. This costs the average family £470 a year in unnecessary food costs. To make your food budget work properly plan your meals down to the last baked bean and make sure you’re not buying fresh produce that is going off before you can use it. Weekly meal planners, cooking large batches and freezing portions, and buying dry ingredients such as rice and nuts in bulk can all help keep food spending down and reduce waste.
Review your monthly contracts – from pay TV to mobile phones, look at everything that you pay a monthly fee for and work out where you might be able to make changes that could reduce your outgoings. Many people find it cheaper to have a pay as you go mobile phone, rather than a contract, or to opt for a SIM only tariff (which could be as little as £6 a month). If you’re paying for a monthly TV package with a big cable provider, remember that advances in technology mean that you can now catch up on many of the programmes you miss for free online and there are streaming services, such as Netflix, from as little as £7 a month. Freeview Play will give you access to around 95% of the most watched TV in the UK, with no bill – all you need is to pay the initial £199 outlay for the box.
Get serious about your finances – take your budgeting seriously and you’ll see big changes in your finances this year. Download a budgeting app to help you stay on top of your money, buy a notebook to work out your incomings and outgoings if you prefer a non-digital approach, and set aside an hour or so a week to go through receipts, plans and spending tallies so that you know where you are. Don’t waste money on pipe dreams like the lottery – your chances of winning are one in 45 million (not one in 14 million, as used to be the case) and every ticket that you don’t buy is more ££ in your wallet.
Make sure you’re saving on savings – as of April this year, anyone earning less than £150,000 is entitled to tax free interest on savings thanks to the new Personal Savings Allowance (PSA). This is not the same kind of tax free saving as an ISA but a new change designed to ensure all savings accounts are tax free. Lower rate tax payers will receive a PSA of £1,000 and higher rate tax payers £500. A poll carried out recently by The Telegraph newspaper indicated that most banks are failing to tell customers about the change so make sure that you understand what it might mean for you in terms of additional money in the pot.
Earn more from the same income – an increase in competition between financial institutions has seen a raft of offers designed to bring customers to one bank or another. You could earn cashback on payments by paying via direct debit from your bank account and some banks are currently offering cash incentives to switch to their service from another. Look out for points your can earn on credit card spending and investigate the various voucher and cashback sites, such as Quidco, which offer cashback on everything you would buy anyway, even on groceries.
Oliver Jones has written for Solution Loans since 2015. His passion for personal finance comes through in the 150+ blog posts he's written since that time. His talent for explaining all things money means he's covered topics as diverse as...Read more about Oliver Jones