11 easy ways to be smarter with your money
Making your money work harder needn’t be tough
Ever wish you had a bit more left in your bank account at the end of the month? Or are there things you’d like to do but it’s taking forever to build up the cash for them?
If so, this article is for you.
We’ve put together some simple tips to help you to save money and make what you have work harder – from being clear about what you want to getting more money from your boss.
1. Kick things off by setting some goals
Perhaps you want to take the kids to Disneyland. To buy a bigger house. Or simply to get a new computer. We’ve all got goals we’ll need money to pay for – and when you’re trying to be smarter with your finances, the simple act of writing them down is a great way to start.
Having clear goals to aim for, whether they’re short or long term, can make it much easier to re-motivate yourself if you ever veer off track.
2. List your income and outgoings
Knowing where your money actually goes makes it easier to spot areas where you could make savings. So dig out your latest bank statement and make a list of your monthly income and outgoings. Just remember to be honest about what you actually spend – it can be tempting to leave things out!
Top tip: Save yourself some effort by using our handy budget planner. It even includes typical spending figures for someone with your income.
3. Pay off your plastic
Paying off any credit card debts can save you a heck of a lot of money. For instance, if you had £5,000 on your credit card at 10.4%, paying it off would save you £520 a year in interest alone.
What’s more, if you’ve got money on your card, unexpected costs such as a broken boiler can push you further into the red (if you don’t have a rainy day fund to fall back on). So if you’re able to, it usually makes sense to cancel it out as soon as you can.
4. Watch out for invisible spending
Ever wondered why all your money seems to vanish ages before pay day? Invisible spending could be the culprit. According to our research, the average Brit spends £948 a year on small, almost ‘invisible’ items such as coffees, shop-bought lunches and post-work drinks.
While each of these things alone might not seem like much, over a lifetime it could stack up to a staggering £47,398 per person – enough to make anyone spit their drink.
Top tip: Use our cut back and save calculator to find out how much invisible spending costs you.
5. Ditch silly bills…
Do you pay for travel insurance when it already comes with your bank account? Have you still got mobile phone insurance for a handset you ditched five years ago? Or are you paying for a subscription for a magazine you never read?
Getting rid of pointless or duplicate bills is an incredibly quick and simple way to save money. Make sure you’re only paying for cover or subscriptions you really need.
6. … and save on the ones you do have to pay
Sadly, there are some bills we can’t simply get rid of. However it is often possible to save £££s a year on them by switching to another provider – or negotiating a better deal with your current one. Your home phone, mobile, broadband, TV and energy bills are all likely targets.
Top tip: Try setting an evening or afternoon aside and checking several bills at once to see if you can make any savings. Just remember to make sure you won’t be charged for leaving a deal early.
7. Use cashback sites and offers
Cashback websites like TopCashback and Quidco enable you to get money back on the stuff you were going to buy anyway – from holidays and insurance to toys and electrical goods. All you have to do is visit the retailer you want via the cashback website and – voilà – the money will be added to your account.
8. Get ‘free’ money from your employer
Are you a member of your employer’s pension scheme? If not, you could be missing out on getting extra money from them. Under new government rules, every employer will soon have to provide a workplace pension (many already do) – and in most cases they must contribute towards it.
You’ll usually have to pay in some money as well, but regardless – it’s a really simple way of being smarter with your money and saving for your retirement at the same time.
9. Overpay your mortgage
If you’re able to, overpaying your mortgage can give your finances a big boost in the long run. You’ll pay it off more quickly and – what’s more – you won’t pay any interest on the amount you overpay. Whether it’s the right move for you will depend on your circumstances, though, so make sure to read up on the topic first.
Top tip: Check you won’t be charged for overpaying. Many lenders will allow you to do so – but they often have a set limit eg 10% of your balance per year.
10. Consider investing for medium and long-term goals
Do you have some goals in mind that are five, 10 or more years away – like helping your kids through university or buying a dream home? Then you may want to consider putting your money in an investment, such as our Aviva Stocks & Shares ISA to help it grow.
All investments involve some degree of risk, as their value can go down as well as up and you may not get back as much as you originally invested. But they also have the potential to grow your money over the medium to long term. Whether investing is right for you will depend on your individual circumstances.
11. Make it a habit
Much of what we do, we do because of habit. Being smarter with your money is no different: make a habit of it, and it will be much easier to motivate yourself to continue. A great way of doing this is to reward yourself – for example with a meal out for reaching a savings target – and you’ll be more likely to keep up the good work.
And don’t forget: if you’ve set yourself some goals, one of the biggest rewards will come when your efforts pay off and you’re able to turn them into a reality.
We could all be a little smarter with our money – and taking these simple steps can be a great way to start, so long as it’s right for your circumstances. For more information and useful tools to help you out, visit our #SaveSmarter page.