Fixing Your Finances Part 2 — Where Can You Save Money?
Welcome back to part 2 on my fixing your finances series. Now you know where your money goes where can you make savings?
If you haven’t read the first part of this guide I strongly suggest you take a look at it here. You need to be sure you know where all your money is going for this next part to be truly effective. Even if you’re a budgeting ace it’s worth giving it a glance to reassure yourself you haven’t forgotten anything.
Before we go any further I want to address potential critics who may say a lot of my posts cover very basic stuff. “Ooooh if you’re struggling with money, make a budget. Groundbreaking!” The fact is, though, when you’re in that situation it can be very hard to see the wood for the trees. You panic and don’t even know where to start to get yourself out of the mess you’re in. In that situation, you need something simple. Something that you can break into manageable chunks and complete without becoming overwhelmed. The best plan in the world becomes useless if you can’t apply it when you need to.
My husband suffers from anxiety and so he is my acid test. When I write a guide I ask myself if he were panicking would he be able to do this? If the answer is no, then I need to make it simpler.
Fixing Your Finances – Where Can You Cut Back?
In part 1 you created a spreadsheet or list of your salary and all your outgoings. I want you to look it over again now. While you do so I want you to consider each item and if you could live without it. Obviously, I’m not talking about your mortgage, utilities or insurance. There are plenty of other things we pay for that we don’t need though. A lot of the time we’re so used to paying for them they just become part of the landscape. Here are a few from my personal experience to consider.
- Do you need a new phone every year?
- Are you still in contract for your mobile phone? Can you shop around for a cheap sim only deal?
- Do you use your gym membership? Really??
- Is your cable package bigger than you need? How many channels do you ever watch? Could you dump it and be ok with freeview and maybe one streaming service?
- Magazine subscriptions. Do you read them or do they get tossed in a corner? If you do read them you could look into subscriptions for electronic copies. Better for your wallet and the environment.
Once you’ve decided if there’s anything you can trim write down the amount you’ll save. If you’d like to spring straight into action and cancel them now that’s great. If not just make sure you do it soon.
Now you’ve decided what you can live without you also need to turn your attention to your essential bills. You can’t stop paying for gas, electric, insurance, and your mortgage, but you can make sure you’re getting the best deal. Unless you’ve been living in a cave for the last 10 years you’ll be aware of comparison sites. Now that finding the best deal is so easy there is no excuse not to shop around every year. There is no benefit to being a loyal customer. The company will always charge you more. This really is fixing your finances 101.
By shopping around you can save hundreds per year. That money can be making a huge dent in your debts. Doesn’t that sound better than padding some massive corporation’s bottom line?
I want you to make a list of your utility, insurance and mortgage providers and if you’re in any kind of fixed-term with them. If you don’t know, find out! As I explained last time, fixing your finances requires that you have a complete understanding of your current position.
For any that you’re not in contract with, go online today and plug your details into a comparison site. I can almost guarantee you’ll make a saving on what you’re paying right now. I personally use Top Cashback’s comparison site because I save money and usually get cashback on top. If you click on the link I will get a referral bonus but that’s not why i’m recommending them, it just works for me. Please feel free to use it or whichever one you prefer 😃
A couple of warnings
Please be careful to check what’s covered by the insurance policies. You don’t want to accept a cheaper deal and then find you’re missing out on something you need. If you’re looking at your mortgage don’t just look at the rate. Look at any costs associated with switching and deduct these from your annual saving to make sure it’s worth it. It’s vital when fixing your finances that you don’t accidentally make things worse by not reading the small print.
If you really don’t want to switch you can try calling your existing provider and telling them you’ve found a better deal and want to cancel. They’ll often try to match it at that point. I don’t do this. I find the best deal I can, buy it, and then cancel with my current supplier. They then choose to give me the “maybe we can get you a better deal speech”. I tell them I’ve already signed with someone else. If they don’t value my business enough to send me a competitive renewal upfront, then I’m outta there.
If you’ve done all of this then great, that must have been a productive day or two! You now have a list of how much you can save on your current monthly budget. In part 3 we’re going to look at if you make any extra cash to pay off your debts faster. Finally, in part 4 we’ll look at how to decide which debts to pay off first.
(In the voice of Frasier) Good evening Musers and good financial health. Thanks for reading!
