Make the money you have today go further tomorrow

lovemoney staff
by Lovemoney Staff lovemoney staff on 26 November 2012  |  Comments 2 comments

To mark Financial Planning Week, guest blogger Rebecca Taylor of Dunham Financial Services looks at how following a technique used by Team GB's cyclists you can ensure the money you have today goes further tomorrow.

Make the money you have today go further tomorrow

Marginal gains: Team GB cyclists used this approach to deliver spectacular performance at this summer’s inspirational games.

As it’s Financial Planning Week this week, and I'm a keen cyclist, I'm going to look at ways we use the same principles to inspire ourselves to make our money go that much further. 

Here are five simple things we could do to make the most of our hard earned cash by making proper plans and becoming savvy spenders.

Get to grips with the numbers

So what is your number? What do you have left each month after you’ve paid your bills, spent money on food, clothes, car, kids, eating out, etc?

Not sure? Well, that’s your starting point. You need to work out EXACTLY how much money your household has coming in each month, then what you spend on bills, food etc. From that you have your “number”. During Financial Planning Week this free online planning tool is a useful place to start.

There's also Lovemoney's MoneyTrack tool.

Back to basics

Is your number positive or negative?

If it’s positive, use it to save and build up some funds for the future. If negative, it’s time for marginal gains! Try to avoid using debt to make ends meet though, in particular payday loans. This is very basic stuff which is the very bedrock of Financial Planning, but it’s easy to forget and drift into sloppy and costly habits.

Set your target

Once you know your number and what you actually spend your money on you can start to look for marginal gains.

They might sound small but can really stack up and make a huge difference. My challenge to you is to aim for a 10% cut in your household spending in 2013 through marginal gains. 10% too high? Go for 5%. Make it realistic and achievable.

Do your homework

Set time aside now to research how you can cut your spending on the items where you have the biggest costs. It’s really not that difficult.

So if you spend a fortune at the supermarket, look at ways you can cut your food costs. Maybe your mobile bill is massive, in which case you need to find ways to cut your mobile spending.

Be a savvy spender

Use sites like Lovemoney to switch to the best tariff for gas and electric and review it regularly. Using an energy monitor and changing the way you use power at home by turning off lights and appliances, moving to low energy bulbs can make a big difference too. 

Make sure you review your phones and broadband, satellite TV, home and car insurance as brand loyalty really doesn’t pay these days. Make it a habit to do a review at renewal to get the best deal available. 

Finally, don’t forget the power of using cash. Paying by card lets us add in those whimsical purchases that we don’t need. Avoid the temptation by switching to cash, it’s great for budgeting and you’ll be amazed at the difference it makes.

Rebecca Taylor of Dunham Financial Sercives is the president of the Institute of Financial Planning

Do you agree with Rebecca's suggestions? How do you take control of your finances? What 'marginal gains' do you plan to make in your finances next year? Let us know your thoughts in the comment box below.

More on budgeting:

Ways to spread the cost of Christmas

Things you can get for free this month

Lifestyle 'essentials' that aren't essential at all

Free MoneyTrack iPhone app live on iTunes

Five tips to control your spending

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Comments (2)

  • guardian1
    Love rating 9
    guardian1 said

    Well, I've posted before about using 'deep discount' stores such as Aldi and Lidl for basic weekly shopping. I'm continuing to do that and will probably do so next year. The savings to be made are quite astounding. There are only two of us to feed but before I started using the deep discount stores, my food shopping came to at least £60 per week. I now find it's around the £35 mark, which includes household goods like washing up liquid, toilet rolls etc.

    One of the main ways I've found to make sure the shopping lasts the week is to plan in advance what meals I'm going to cook and then buy foods accordingly. When planning the week's menu, I make sure I will be able to use everything - eg, a free range chicken (£5) will provide a roast dinner, sandwiches the next day for lunch and be used in a stir fry the second evening (could make soup too even after that if I could just get around to it!). It means there's very little waste and that's satisfying in itself.

    Another way to save money which I'm determined to stick to from now on, is making sure I have breakfast before I go off to work. I very often don't grab more than a quick coffee and by the time I'm driving to my first appointment I'm starving - so end up buying a sandwich or croissant en route. A plain old egg sandwich this morning cost £2.55 and that's at the cheap end of the market. Do that 5 times a week, and it's £12.75 of really unnecessary spending - or £51.00 per month - which would be very handy for other things, like going towards fuel bills. Making lunches instead of buying them out (except as the odd treat) will save at least a similar amount and probably quite a lot more. I could imagine saving about £150.00 per month just by making those small economies - and that's certainly an amount not to be sniffed at!

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  • Mike10613
    Love rating 632
    Mike10613 said

    Most people can save money by not paying interest to credit card companies, not paying extra to pay the car insurance monthly and paying the telephone line rental in advance. Ignore interest free credit, the interest is added to the price. I have half my income left at the end of the month, so I can afford to pay things annually. Getting into a lifestyle where you don't waste money, food or anything that costs money will make sure you stay solvent. The important thing is to feel financially secure and be able to sleep at night.

    Report on 26 November 2012  |  Love thisLove  0 loves

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