The ultimate guide of the best money saving tips for beginners and experts
If you want to gain a degree of financial freedom, whether it be to work less, or to just not have the stresses of debt, then you need to find ways to cut back on spending.
We have found that the best way to save money is to combine many techniques together. Some techniques may only put a few pennies back in your pocket. But if you combine them all, you’ll be saving a lot of money.
Whether you’re just starting out on your money saving journey or you’re a veteran looking for some new ideas, our ultimate guide to saving money includes the best tips and tricks to help you keep more of your own cash in your pocket.
Not all of these tips will apply to everyone, but at least some of them will. The list contains the best ways to save money that we have tried and tested ourselves (or had recommendations from trusted friends).
You can use these top tips for saving money to help you:
- Pay off debt faster
- Get away from living paycheque to paycheque
- Save for a rainy day
- Save for your first home
- Build a retirement fund
We’ve split this guide up into major categories to help you find tips for saving money in different areas of your life.
Save Money On Your Bills
Seeing your money quickly drain out of your bank can be very frustrating, but paying for gas, electricity, water and rent are all essentials that we can’t escape from. Thankfully, there are plenty of ways we can cut the cost of utilities and other essential services.
1. Cut the cost of borrowing
Borrowing money is very expensive. The interest rates on overdrafts and credit cards can often exceed 40%. This means that if you borrow £1,000 for a year, you’ll spend £400 in interest.
That’s £400 of your hard-earned cash going to a bank each year, instead of being put towards a house deposit or a holiday.
Thankfully, there are ways you can cut the amount of money you spend on the money you borrow. Often, the easiest way is to find a 0% interest credit card to transfer the balance of an existing card to, in doing this you can pay back the debt faster since you won’t be covering the interest first.
If you’re not eligible for a 0% credit card, there are some with much lower rates of around 4-6% that may work for you instead.
If you have personal loans, consider switching them to a different provider who will offer you a lower rate, or using a 0% money transfer credit card to pay it off.
2. Get a free overdraft
If you find yourself dipping into the overdraft of your bank account on a regular basis, find a bank that offers a 0% interest overdraft.
These aren’t usually very big, but not paying fees for borrowing up to £250 is a great way to save on your monthly outgoings.
3. Switch Energy Providers
In England and Wales, switching your gas and electricity provider is quick and easy, and it can save you hundreds each year. For these reasons, you should definitely consider comparing the providers and switching every once in a while.
Some people don’t switch as they assume they’ll be without power or they’ll need to wait for an engineer to come out to complete the switch. These are both untrue. Switching usually happens without you even knowing, and you still receive the same gas and electricity, you just pay someone else for it.
One of our team was once a customer of an English energy provider that went bankrupt. Although others may have had a different experience, theirs was painless, the lights stayed on and they just had to start paying a different company.
Using services like Uswitch can make it easy to compare energy providers and find the right one.
You can also save money on your energy bills by using less, we have more tips on that below.
4. Switch phone, internet and TV provider
Loyalty doesn’t usually get rewarded by telecoms companies. You’ll usually be offered a tempting rate for your TV, phone and broadband but then it’ll get bumped up after 12 or 18 months.
Instead, just like you switch energy providers, you need to switch your telecoms provider when the deals come to an end.
You can use the same comparison services to find cheap phone, broadband and TV deals.
You can also cut back on what you use. If you pay for satellite or cable TV, consider ditching it in favour of just terrestrial TV or a Netflix subscription. This can save you hundreds of pounds each year.
5. Use price comparison tools for insurance
While we may not like paying for it, insurance is important. In some cases, it is a legal requirement, and in every case, it’s a safety net that protects us if the worst happens.
So whether you’re buying home, car, pet, travel or life insurance, be sure to use price comparison sites to find the best deal. It’s never usually a good idea to auto-renew any insurance product as, like with telecoms products, loyalty is not usually rewarded.
6. Check your bank statements
It may not always be enjoyable to check your bank statements, particularly if you’re scared of what you will see. But if you don’t check it regularly, you may forget that you’re paying for subscriptions you’re no longer using.
This could include gym memberships, magazine subscriptions, or mobile phone insurance for a phone you no longer own.
It will also help you spot fraud, which can be easier to resolve if you spot it quickly.
Try to at least check it once a month, but if you can do it more often than that, then it’s even better.
7. Stop overspending on your mobile phone contract
It’s nice to have the latest smartphone, but today, the top of the range handsets from leading brands can cost as much as £1,500. You may not notice this since you pay for them on a monthly basis, but they add up very quickly.
Today, smartphones will last longer than the 2-3 year contract you take out, so if you want to keep your phone after it ends, make sure you switch your tariff. Otherwise, you’ll carry on paying for the handset when you don’t have to.
Consider switching to a SIM-only tariff. These are significantly cheaper and can be on a 30-day rolling contract or a 1-2 year deal.
You can usually use price comparison services to find the best smartphone contract.
If you have a smartphone that is a few years old, there are a few things you can do to keep it running smoothly to eke out another year or two from it. Check out our guide on speeding up your smartphone to find out more.
8. Save money on calls and texts
In the UK, 0800 and 0808 numbers are free to call on your landline or smartphone, and most pay-monthly tariffs include a set number of minutes that you can use to call other mobiles and landlines.
Some other numbers, such as 0845 and 0870 numbers cost money to call. Often though, you can find a free alternative by using the SayNoTo0870 service. Just go to their website and search for the number you want to call. A list of alternatives will then be returned to you.
If you need to send texts but don’t have any free texts or credit left, then you can use services like iMessage, Facebook Messenger, and Whatsapp to send messages for free, provided you have mobile data or WiFi available.
Plan Your Finances
One of the best ways to save money is to actually know how much you have coming in and how much you’re spending. This way, you can make adjustments to your spending habits to help you save more money.
Here are some tips on how to plan your finances better.
9. Set a budget
Making a budget needn’t be scary or complicated. Just simply calculate how much money you earn after tax, and then subtract your monthly bills. Once you can see what’s left, you know how much you have to spend.
This may be a bit over-simplistic, but that is all a budget is.
You can see how much you earn after tax by looking at your payslip or seeing how much is added to your bank account each week/month. If you’re paid a different amount in each period, calculate the average by adding up the last 6 or 12 months and then divide it by the same number.
Then be sure to account for all your bills, which may include:
- Council tax
- Travel costs
- Pension contributions
- TV license
- Gym membership or other subscriptions
- Your hair cut
- Car tax
- Food and groceries
To help you get started, there are budget templates for Microsoft Excel that you can download online.
10. Track your progress against the budget
Setting a budget is pointless if you never look at it again. While you may not have the inclination or energy to account for every single penny of spending, you should do some rough tallies of how much you spend in each category to make sure that you’re on track.
If you find it hard to stick to a budget when you go shopping or on a night out, use cash and don’t take a card with you. That way you can only spend what you have with you at the time.
This means you can’t take advantage of cashback credit cards or other clever tricks, but sticking to your budget is usually more important.
11. Use software to help you
If you hate the idea of using a spreadsheet, find a tool that can help you. Thankfully, there are plenty of free ones.
Services like Moneydashboard and Yolt can connect to your bank account and let you see how much you’re spending on each category.
You can also use services like Monzo which let you set pots of money aside for your spending each month, which can be a lot more user-friendly than a spreadsheet.
Save Money on Motoring
Aside from houses, cars are often one of the most expensive things that we will buy. The costs don’t stop there though, repairs, maintenance insurance, fuel, and tax can all drain your bank account dry.
While you most likely need to keep driving your car, you can apply these top money saving tips for driving to help keep hundreds of pounds in your pockets.
12. Don’t feel the need to have the latest and greatest car
We all like to have nice things, but when it comes to cars, this usually comes with a hefty price tag. With easy access to finance and lease deals, it’s much easier to drive new and fancy cars, regardless of whether we could afford to buy them upfront.
New cars will depreciate around half their value in their first year. So even if you buy a small car, you’ll likely lose around £7-9,000 in 12 months.
Buying one that’s a few years old will save you a lot. Also don’t feel pressured into upgrading to a new car every few years just because others have also done the same.
13. Save money on fuel by driving gently
Petrol and diesel cost a lot, so you’ll save a great deal of money if you can burn less of it. Driving your car gently, using a technique called “defensive driving” can help to reduce the amount of fuel that you burn and also reduce your risk of being involved in a crash.
By accelerating more gently and slowing your car down earlier by using engine braking (taking your foot off the accelerator while it’s in gear) can reduce the wear on your brakes and tyres and burn less fuel while you accelerate.
14. Save money by driving slower
Driving at slower speeds on motorways and other fast roads (while still driving safely) can also lower your fuel consumption. According to the UK’s Vehicle Certification Agency, driving at 75 mph instead of 60 mph increases fuel consumption by 18%.
15. Inflate your tyres to reduce fuel consumption
Inflating your tyres can reduce rolling resistance and decrease your fuel consumption. They should be within the manufacturer’s specified limits, but many include a slightly higher pressure that’ll save you some money.
Regularly check your tyre pressures to make sure they stay at their optimum level.
16. Remove the junk from your car
Most people keep stuff in their car that they don’t need. For some people, it’s half-finished bottles of water, for others it’s their beach gear that they haven’t used for months.
Periodically clear out stuff that you don’t need in the car to be sure you’re not carrying around unnecessary weight. This increased weight will require your car to burn more fuel when you drive around, so removing it will save you money.
17. Use an app to find cheap fuel
For the most part, the fuel you get from most petrol stations is the same, no matter what price you pay for it. Supermarkets typically charge less for fuel than other brands so if you can fill up there, do.
Download the Petrol Prices app to help you find the cheapest place to fill up near you.
Just don’t fall into the trap of driving many extra miles to save a few pennies per litre, you’ll likely burn more fuel by getting there.
18. Use loyalty cards and cashback cards when buying fuel
There’s no escaping the fact that we need to buy fuel if we want to drive around, so you might as well get back as much as possible from the money that we do spend. Using cashback credit cards and loyalty cards can help us get a little back.
Tesco, Sainsburys and Morrisons all have loyalty cards, as does Shell. You can use them to get a little extra back on money you were going to spend anyway.
Cashback credit cards can also help you get a little extra back as you spend on fuel.
19. Keep your car maintained
Cars can breakdown, often out of the blue. However, by keeping your car well maintained can help to keep it running efficiently and reduce the likelihood of a breakdown.
Get your car serviced at least once a year or after 20,000 miles (or less if your manufacturer recommends it). If anything breaks, get it fixed right away, the longer you leave it, the more it will likely cost.
20. Drive less
Most of us can’t avoid driving at all, but we can find ways to drive less. While driving gently can save a lot of money, not driving at all will save even more. Instead of using your car, you could walk or cycle.
When driving is necessary, try to plan your journeys so you don’t have to make multiple trips.
If you live near a city, using public transport may be cheaper than driving and parking for a day too.
21. Find cheap car insurance
Car insurance is a legal requirement, but it can cost a lot. Never auto-renew your car insurance, instead use price comparison services get the cheapest quote.
Even if you’re happy with your current provider, you could call them with the quote you found to negotiate a cheaper price.
Save Money on Travel
Driving isn’t the only way to get around, there are plenty of ways to save money when travelling by boat, plane or train too. Here are some of the best travel money saving tips.
22. Book train tickets in advance
Train tickets in the UK can be astronomically expensive. For those that have the luxury of booking in advance, you can save a small fortune. In most cases (especially for longer journeys), the earlier you book, the more you save.
Use sites like Trainline or a train operator’s website to book your tickets. Remember, all train companies can sell you tickets for any route, so you may save money by booking with Transpennine Express or Chiltern Railways over Trainline as they don’t charge booking fees and the tickets cost the same.
23. Get a Railcard
Railcards are a great way to save money if you travel regularly, or if you’re planning to buy expensive train tickets. Some of the most popular are the 16-25 and 26-30 Railcards as these give you ⅓ off rail fares for around £30 per year.
One journey from Manchester, Liverpool or Leeds to London could yield a large enough saving to warrant a Railcard.
You can also use your Railcard to get money off your London Underground journeys, you’ll need an Oyster card and to ask a member of staff at the station to activate the discount.
24. Split train tickets to save money
Sometimes it can be cheaper by buying multiple tickets for one journey. Say you’re travelling to London Euston from Manchester Picadilly on a train that stops at Crewe and Milton Keynes Central. It may be cheaper for you to buy a ticket to Crewe, then another ticket to Milton Keynes, then a final ticket to Euston.
This isn’t always the case, but it definitely works sometimes. It used to be a real pain to work out, but now services like TrainPal can do the hard work for you.
24. Compare flight tickets
Just like you can compare insurance and utility costs, you can use services to find the cheapest plane tickets. You can use sites like Skyscanner to find the cheapest airline, route, time of day to fly.
If you’re flexible on when you travel, you can even use it to find the cheapest day in a given month.
25. Be careful of hidden extras when flying
Airlines often offer cheap tickets that look incredibly appealing. However, the cost soon shoots up when you account for hold luggage, the “privilege” of sitting together, the option to check-in sooner, or even take a bag on board that’s larger than a small handbag.
When you account for all of these, they may not be cheaper than some of the more traditional carriers, so just do a final check once you know what the “all-in” price will be.
26. Travel out of season
Travelling during busier months, particularly around school holidays, Easter and Christmas can really push up the price of travel. If you’re childless and have the flexibility, consider travelling at times when flights and accommodation are not as in demand.