How to save smarter

Several piles of pound coins.

Aviva is on a mission to help Britain save smarter. Last week I wrote about their great new Financial Personality Tool and was pleased to discover that my alter ego was The Oracle. This puts me in a good position to share some tips for how to save smarter.

What I will say before I start is that, although I’m sensible with money to the point of being quite boring, we don’t have a lot of it coming in. With the exception of one small freelance gig, this blog is our only source of income. As a result, there are some months in which we don’t save at all and end up living hand to mouth, but the important thing is that we’ve never been in the red since I started working for myself eight months ago.

Cut down on treats

My first tip is easily the hardest one to stick to, but as it involves vices it’s also an area where big savings can be made. Two of my biggest weaknesses are red wine and chocolate. We were spending way too much on these when I was well off but miserable in my old job. The secret is not to cut things out completely, but to reduce them. Life’s short and is for living, so it’s about finding a balance. We now have a weekly budget for groceries and, if buying treats means that we would exceed it, we don’t get them.

Sell, sell, sell!

Depending on which research you’re reading, the average home has somewhere between hundreds and thousands of pounds worth of unwanted items. It’s all too easy to fall into the trap of thinking you’ll use them one day. I’m looking at you, breadmaker. But, in reality, if you haven’t used something in a year you’re never going to. As well as sites like eBay, there are plenty of local Facebook groups where you can sell things without the need to post them or pay the site in question.

Question time

Before you buy anything, ask yourself whether you really need it or, if it’s a luxury. Can you justify the cost? For example, there are several very expensive baby products that are marketed as must-haves that you simply don’t need. We’ve saved ourselves getting on for £1,000 in this way. Similarly, as we already have Sky, I took the tough decision not to get BT Sports this season.

Shop around

This applies to a lot of different things, from groceries to energy and insurance providers. Own-brand food is just as good as branded stuff and you can almost certainly make a saving that’s worth having somewhere else with your monthly bills. On a related note, although comparison sites are helpful and streamline the process, remember that not all providers are on them, so shop around elsewhere too.

Keep an eye on outgoings

I have a spreadsheet for bills going back to when Kate and I first moved in together eight years ago. I said I was boring! But it allows me to keep an eye on how much we’re spending. It also helps me work out how much we’re likely to need before the bills come in. For example, March is always an expensive month as we get our energy bill for the coldest months of the year. Plus the TV licence and a hefty water bill. Forewarned is forearmed! We’ve also just had a smart meter installed so we can see how much energy we’re using. It focusses the thinking regarding what actually needs to be switched on and when.

You can find out your financial personality here

You can join the conversation on social media by using the hashtag #SaveSmarter

Disclosure: this is a collaborative post.

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