Maybe you’re preparing for a particularly financially tight month. Or you’re looking for ways to stop living paycheck to paycheck. Maybe you’re wanting to boost your monthly savings without taking the equivalent lifestyle cut. Looking for easy and painless ways to save money every month can seem like looking for a needle in a haystack.
We all know that we need to save, but it’s so easy to get stuck in a sense of apathy towards your finances.
Well in this article, I’ll go through some easy and painless ways to save money every month that don’t come with a trade-off other than a bit of time investment.
The aim of the game
Ok, so whenever people talk about these kinds of topics it is normally coupled with pleas and decrees to cut back on your spending.
“Stop spending on coffee you jerk!!!!”…
… “How DARE you go out with your friends “
“Who needs to wear clothes anyway, right?!” …. scream the exasperated personal finance bloggers.
Now, I’m not about to decree how you should live your life.
However, I believe that everyone is throwing money away on bills and services that are sold elsewhere for cheaper.
Almost everything in life comes with a trade-off. You spend less, you get less. You spend more on one thing, you have to spend less on another. Etc.
However, this is one of the rare instances where that isn’t the case. I’m willing to bet that there are services you use and pay for that are available cheaper elsewhere.
There is no catch, you just need to put in the work…
How long will this take?
First, you’ll need to read this article. I promise to not make it as boring as it sounds… stick with me! But this should only take 5 minutes.
Putting the tips into practice can take anywhere between 1-2 hours.
But this is likely to be the highest paid couple hours work of your life.
Say you make a £100 saving as a result, that equates to a saving of £100 per hour (or £50 per hour if it takes you two hours).
Now, remember this is all post-tax. To earn an equivalent amount you would have to earn an extra £147 (assuming you’re a basic rate taxpayer).
This is massive. If you earned this hourly (working a 35 hour week) you would be earning £267k a year!!
Bear in mind that we’ll be focusing on recurring savings.
If you make a £100 per month saving, that is £1,200 per year!
That one-hour time investment has now just netted you £1,200 per year saving. This is the equivalent of you getting a ~£1,800 pay rise (more if you’re a higher rate taxpayer).
I hope by now you realise this can be one of the most impactful hours you’ve spent on your finances.
As you go through, be sure to keep track of any savings you make. Even though they might be small here and there, they add up.
So, let’s jump in…
Track your expenses
Now this sounds boring as sh**, I know.
But this is critical as you need to spot the easy and painless money saving opportunities
By combing through your bank statements you can’t argue with the data right in front of you.
Grab your bank statements and/or credit card statements and comb through each transaction. How far back you go is up to you, but 1 month should be the minimum. Alternatively, try using one of the many budgeting and spend tracker apps that are available to automate this task.
Now tag up your recurring transactions.
Tag up your recurring transactions
Your recurring transactions are ones that happen on a regular basis, maybe once a week or once a month.
Normally these will be paid automatically through a direct debit or standing order. Or you may receive a bill on a regular basis which you pay manually.
Tag these up by marking them on your bank statement or making a note.
We want to get to the point that you have a list of all of your recurring expenses.
Typical recurring expenses are:
- Subscriptions such as Netflix, Amazon Prime
- Utilities bills such as electricity, gas
- Media packages such as Sky, Broadband
- Phone bills
- Newspaper subscriptions
- Bank fees
- Housing (such as rent/mortgage)
- Loan repayments
Easy and painless ways to save money
Now that you have a list of all of your recurring expenses, we’re going to methodically work down the list looking for either cheaper providers with no change in service, or alternative services with only a slight change in what you receive.
Let’s get started on this partyyyyyyyy…
Utilities (£300+ per year)
I called up my own energy supplier the other day and managed to save £70 per year just by moving to direct debit… how does that work?!
To make savings on your utility bills, first do a few things.
- Find your existing energy bills from your current supplier
- Run a price comparison on the large comparison sites such as MoneySuperMarket and USwitch or the Citizens Advice Comparison Tool.
- Call up your existing suppliers and ask if there is a cheaper plan (making note of these and comparing against your earlier price comparison searches)
- Go with the cheapest
Want to automate this process forever? There has been a proliferation of interesting companies in the space of automating the process of moving you onto a fairer (and cheaper) deal.
Look After My Bills is one of them. Their service automatically switches you to the best deal when it is available, automatically saving you from the steady bill-creep that the big energy giants seem to use as a strategy. I’ve not personally used the service yet, but they are well-reviewed on the whole.
I’ll run a wider review of Look After My Bills later this year. But if you’re uncomfortable signing up to a platform like that, just run through the manual process above.
Insurance (£200+ per year)
First, run through your list of insurance policies to make sure you’re not duplicating two policies.
Secondly, run a price comparison deal on the large price comparison sites to check for cheaper deals for the same policies/coverage.
The obvious place to start on this is car insurance if you have it. Don’t ever just blindly accept your provider’s renewal offer, as it is almost never the most competitive.
Follow this process (it will be similar for all of your other insurance policies):
- Go to one of the main price comparison sites to get a competitive quote for your insurance policy. I like to use MoneySuperMarket but others are available.
- With this information, call up your existing provider and ask for a renewal quote. Explain the other prices you’ve received and if they would match it if their quote is not competitive.
- If they don’t match it, then open up the policy with the other provider via the price comparison site and cancel the renewal of your existing policy
I was with Admiral on my car insurance paying £627 a year when I first moved back from London and got my car last year.
I received an email from them saying that my renewal was coming up and it would cost me £541.
Bosh, cheeky £86 saving I thought to myself
But after checking MoneySuperMarket, I couldn’t believe my eyes.
I had a quote come back for £320. But guess who from?
So I called them up and asked if I could take this policy from them. I provided them with the quote number from the price comparison site and they processed it through no problem.
Simply running that price comparison and ringing them up saved me £307 per year.
So don’t think loyalty pays in this business. Always shop around for the best deal whenever your policies come up for renewal.
Mortgage payments (£variable)
Now it is very unlikely you’re able to renegotiate your rental payments, so unfortunately I don’t have any tips for you.
But if you have a mortgage, then make sure that you are regularly re-financing your mortgage whenever your initial period is up. There may be cheaper options out there, and saving money on interest payments can have a huge difference to your monthly repayment.
However, it does come with a few costs so make sure that the savings you expect to get from refinancing outweight the additional costs.
An advisor like Habito will also be a good place to start and can help guide you through the process.
Loan/credit card repayments (£variable)
This can move the needle massively for you.
If you are paying back a loan or a credit card balance, then chances are you’re paying a decent chunk of interest too.
If you’re able to move these debts onto a cheaper interest rate, then you’ll be saving some serious money.
You can do this by:
- Moving credit card balances to a 0% balance transfer card (if available)
- Moving credit card balances into a cheaper personal loan (if available)
- Moving personal loan balances onto a cheaper personal loan (if available)
In all of these instances, you’re likely going to need a good credit score in order to get the best deals. But even if you don’t have a good credit score, it is worth checking to see if you can get cheaper credit that you can move your balances to.
- check your credit score using the free providers ClearScore and Credit Karma
- compile a list of your credit balances (personal loans and credit cards) along with their interest rates
- use a price comparison site (or ClearScore/Credit Karma) to see if you have credit available cheaper that you can transfer them to (if eligible)
But bear in mind;
- if you’re moving credit card balances onto a personal loan, you will be saving interest costs but your monthly payment might actually increase. This is because if you have been paying the minimum monthly payment on your credit card you’ve hardly been touching the principal, whereas if you move it to a personal loan you will be paying off both the interest and the principal.
- make sure you check to see if your existing personal loans have any early repayment or early exit fees which might negate any savings you make by transferring
Subscriptions (£60+ per year)
The lowest of all low-hanging fruit here.
You’ve probably notched up a fair few subscriptions at this stage. Netflix, Amazon Prime, Disney+, Spotify, Google Music, Tidal, Newspaper subscriptions, magazine subscriptions, Beer club subscriptions. You name it, there’s probably a subscription for it.
With each subscription, multiply the monthly number by 12 to look at the full yearly expense.
Now ask yourself:
Would I spend that full yearly cost on each one of these because I love it and use it so much?
If the answer is no, bin it.
If the answer is yes, then brilliant, you’re spending your money on something you actually use and love. However, let’s ask ourselves the following:
Is there an alternative that does the same but at a better price?
For example, if you have Netflix and Amazon Prime, then how about switching over to just Amazon Prime and cancelling Netflix? You get most of the same content (albeit you will sacrifice some content here and there).
Saving one subscription at £5.99 per month saves you ~£72 per year. Multiply that by 3 subscriptions and you’ve saved ~£216!
I’ve put together a quick round-up of some cheaper alternatives to the classic subscriptions. But do a bit of research or a bit of soul-searching and streamlining here can quickly add-up.
Working through your existing recurring expenses should provide a list of opportunities for you to make easy and painless savings every month.
These add up. If you invest one hour of your time and make £100 worth of savings, this is the equivalent of earning £140 before tax. If you earned this level for your normal 35 hour week, you’d be earning £267k a year!
Run through your statements to find your targets. Then use price comparison sites and other tools to find cheaper versions of the same service.
This means no change in lifestyle for you, just more money in your pocket. Truly painless.
Have you found any other easy and painless ways to save money? I’d love to find out. Drop a comment in the comments section below!