Stop Spending
Tips, tricks and tools to help you fight yourself
NOTE: Even though Martin Lewis’ site is dedicated to users in the UK…you’ll find his insights very usable. A link to the rest of this piece and his site can be found at the end.
Be under no illusion, a full money makeover will take a good eight or ten hours, but it’ll be worth it. In my ITV1 series Make Me Rich, I was challenged to go to families’ homes and save them as much as I could in a day.
The average saving was a little over £5,000 a year; and this was before I started to say “cut back”. Now, suppose by doing it yourself, you only do half as well, saving £2,500 (though hopefully you’ll do better); compare that to what you earn! And remember this saving is without tax so unless you’re paid £3,500 a day (just under £900,000 a year) it’s likely to be the best paid day of your year!
What if you don’t have the time?
Then make the time. This is incredibly important. However, if you simply can't right now and just need a quick MoneySaving hit then shimmy straight along to Step 2: Pain-free savings and you should still manage to gain serious cash.
Can I get someone to do this for me?
“Aaaarghhh!” I’m asked this all the time, and hate this question; asking it means you’ve missed the whole point of MoneySaving. The process doesn’t just save you cash, it empowers you to understand how companies will take your cash through ignorance, apathy and inertia. Yet even if that wasn’t the case, there aren’t any MoneySaving advisers, the service doesn’t exist, and even if it did, their cost would eat up much of the gain.
Step 1: Do you spend more than you earn?
This isn’t a trite question. Unless you know the answer, we can’t work out how militant the savings must be. Standard MoneySaving is about cutting your bills without cutting back; it involves changing your finances not your life. Yet if after that you’re still spending beyond your means, there’s a major problem and cutting back may be necessary too; meaning lifestyle as well as MoneySaving changes.
Of course those spending less than they earn may only need to free up wasted cash, so it stays in your pocket, not in that of big companies. This is why it’s important to know where you stand.
How to find out?
There are two ways:
- The BIG Danger Signal.
Are you in debt? If you are, and can’t answer the question, “what are your debts from?”, in other words you didn’t ‘buy a car or a conservatory’ but simply used cards or loans to fill the gap; then this sounds an ear piercing alarm.
It means your debt comes from systematically spending more than you earn. If this is the case, no further investigation is needed, we know the answer and you need to skip straight to pain-free savings. - Accurately assess your spending.
If you’re not sure where your finances stand, you need to add it up. The specially designed Budget Planner calculates your genuine annual income and then tells you exactly how much more you spend than you earn.
Most people are shocked by the result, as many who think they’re within budget month-by-month, aren’t when it’s done over a year. This is the start point of sorting out your cash so spend the time to do the budget.
Step 2: Pain-free savings
The essence is simple; if you can get the same thing paying less; then do so. Yet it's not only about car insurance and credit cards. Saving money stretches to cutting childcare costs, cheaper contact lenses or checking your council tax bill; it's what this whole site is dedicated to.
How to do it
This site has well over 100 detailed MoneySaving articles each picking the best deals. Below I’ve deliberately selected some that enable big and easy savings on current outgoings. Yet do also check every section (using the tabs at the top of the page) for your specific needs and in current climes the Recession Proofing guide contains extra tips on how to protect yourself during a recession.
For the rest of the online course, go here:
Check out his Free Budget Planning software too.
http://www.moneysavingexpert.com/banking/Budget-planning#bplanner