Whether you are saving up for a big purchase or just want to have more disposable income left over after paying off your priority bills, reducing your monthly expenses is one of the best ways to meet your financial goals. Most of us are paying out each month for things that simply aren’t worth it – and if you’re often left wondering where your money has gone at the end of every month, reducing your monthly expenses gives you a chance to sit down and take a good look at your bank account to determine exactly where your money is going.
Some monthly expenses, like your rent or mortgage payments, may be harder to reduce than others, but for the most part, there’s always the opportunity to save some money. Here are some tips that you might find useful.
1. Take a Look at Your Monthly Spending:
Before you start, it’s a good idea to sit down and go through your bank account to see exactly how much money you are spending each month and what it’s going on. If you have online banking, use your app or log in on the website to go through the past month and see what you’ve been spending on. Don’t just look at your direct debits and standing orders – look at where you’re spending your money on things like eating out, entertainment, new clothes, leisure and everything else. Then, make a list of everything you definitely need to pay for, like your rent, council tax, utility bills, and food.
2. Find Cheaper Deals for the Essentials:
You can’t get away from paying for those essentials but the good news is that you can often find better deals. If you’re in a position to do so then you may even want to go so far as to move out of your home and into a cheaper rental property. If you’re not moving then there are several ways to reduce your priority expenses further – apply for any council tax discounts you may be eligible for, check comparison sites to see if you could be paying a better price for your gas and electric, and check how long of your contract is left on items like home broadband or your smartphone. If your smartphone contract is almost up and your phone is still in good working order, you can often save a significant amount of money switching to pay as you go or a SIM-only contract instead of upgrading.
3. Pay Off Your Debts:
If you are paying back money that you have borrowed in the past such as credit cards, loans, and hire purchase items, paying off more than you usually do will reduce the total amount that you pay in the future. The debt snowball method is a good way to both pay off debts and reduce the total amount you spend on them each month – start with your smallest debt and pay more towards it until it’s paid off, then put the money that would usually go to that towards paying more to the next one, until you reach your largest debt – by then, you’ll have all the money you’d usually pay towards the ones you’ve paid off. If your debts are quite large, then a loan via someone like Readies.co.uk can also be a good idea – use the loan to repay everything in full, leaving you with just one monthly payment to make that’s usually a lot less compared to what you pay individually.
4. Look Out for Little Purchases That Add Up:
Sometimes it is the smaller purchases that you barely notice at the time that add up and end up taking the most out of your monthly income. For example, if you stop at Starbucks or Costa for a coffee every morning before work or buy yourself a sandwich from the local café for your lunch every day, you probably don’t really notice the few pounds it costs at the time, but by the end of the month you could have spent hundreds on these purchases alone. Instead, taking packed lunches into work and getting a reusable coffee cup to make your own hot drinks to take with you in the morning can help you save a surprising amount. You could even invest in a coffee machine to make your favourite lattes and cappuccinos – after a while, it’ll pay for itself with the amount you’ll save.
These are just some of the best ways to start cutting down the overall amount of money you spend each month, and over time you’ll start to notice more and more ways to save.