As we have talked about repeatedly here at Make Money Your Way, there are two ways to get richer, and increase your net worth. The first one is making more money, and the second is to reduce your expenses. While I am an advocate of making more, since the possibilities are endless, I also don’t see why you should work more to make more, just to spend it in things you don’t really need. Paying more than you ought to for a service or a product means you do not optimize your income.
With the new year, you have probably made a few resolutions, like exercising more, or being more organized. A few of those resolutions can actually save you money, with little effort.
Reviewing your financial accounts
First thing I tend to check in the new year is if my savings accounts are earning the best interest rate possible. If not, you are missing out on some money. The next natural step if you are carrying a balance on your credit card is applying for a 0% deal, which can save you lots of money on interest over the year.
Switching from a 0.5% interest savings account to 1% can earn you an additional £5 per £1,000 saved. On the other hand, the savings with a 0% balance transfer are much higher, if you had a 20% interest credit card with that same £1,000 balance and are able to get a 0% deal, you can save a huge £200. It only takes a phone call or a quick online application.
One pack a week at £7 and you would save £364 over the year. That is enough for a nice weekend getaway, or a £25 diner every single week. There are lots of programs, including treatments from the NHS or electronic cigarettes to help you do just that.
Cycle or walk to work
If you are able to cycle or walk to work, you probably have a very short commute anyway. But your car costs money in petrol, insurance, parking… I rent my parking space to a person who works near my house for £80 per month. While he lives a bit far to walk to work, he could ride the bus on a £30 monthly pass, and walk from the bus station, keeping fit AND saving £600 per year.
It is much easier to get a quick take out or grab a beer and snacks at the pub after work than coming home to cook, you are tired, and the convenience is really appealing. However, two such nights a week at £15 quickly add up to £360 a year!
You can still have fun and stay social on less, inviting your friends over for a bottle of wine or to watch a game instead.
And instead of that £5 lunch you buy every day at work, you can pack your diner leftovers to eat, and save another £1,200 per year (5 lunches at £5 per 48 weeks).
Most of those resolutions will not impact your quality of life but can help you drastically improve your finances. You can also check Savvy Scot’s New Year financial boot camp for more money saving new year resolutions.