We all want to have more spare money, and less of that being put to the bills. Although it’s an essential part of our daily lives, there are some little things you can do to actually keep on top of your expenses. When I say that, I mean everything from the rent, utility bills, car insurance up to the little fun subscription services.
Okay, I get it’s not a glamorous topic for young people to talk about. But if it’s not talked about, how can you set yourself up for healthy financial habits and good discipline? Saving money on bills is great for putting your money in more places that you want it in.
I’ve been on a mission these past few months to cut my living expenses slightly more. Thinking more about the future and wanting to save and invest money meant the last thing I wanted was to waste it on things I don’t have to.
Actually Look at Your Expenses
I think this is probably the first important step to taking action. Most people don’t take the time to sit down and look at their bills. Assess where your money is going. How much of it is going where?
It’s understandable since free time isn’t always in abundance. I’ve been very lazy about checking where I spend, and have continued not to face my bank account and go with the flow. The problem is that how can I save money if I’m not even checking how much disappears?
In general, it’s going to be harder to make a plan that works without getting an idea of the current situation. So see what’s happening. I’ve been very surprised to see that impulse food purchases such as lunches make up most of my extra spending. But on top of that, I am paying the same bills at the same price for a long time.
You might actually find that you could pay a better price for the things that you already have.
Plan A Budget
Once you have sorted out your spending, start making a plan of action. How do you actually want to spend your money? Do you want to start a savings bank account, maybe even an investment portfolio? Whatever it is, a plan can simplify the task and make it easier to do.
For myself, I have recently opened an account with the online banking platform Monzo. (don’t worry, I’m not sponsored by them!) Monzo is a pretty revolutionary new type of banking system that works totally online without a physical branch. Not only is the mobile app easy to use, it’s features are definitely very helpful and maybe better than most traditional banks.
You can organize your ingoing and outgoing money into sections, and visually see what bills or expenses are costing in total. You can also open a joint account with another Monzo user easily. I have done this with my partner to help us divide and track our spending together more easily.
Once a budget is set up and you understand what you are spending and where, this is where you can start making adjustments to how much you’re paying.
Using Comparison Sites
I think it’s a no brainer when it comes to looking for the most affordable deals on almost anything. Home and car insurance or utilities can be compared on these sites. And the best thing is there are a few different comparison sites to use.
Instead of sifting through loads of insurance companies, electric providers and broadband services, you can do one easy search in a comparison site like money supermarket or compare the market and get a reasonable quote.
I assume that comparison sites earn some commission for advertising companies and their price deals. However, even with that I don’t really notice anything too pricey because of that. So in general I think it’s a great way to find reasonable costs.
Switching Suppliers Often
What do I mean by this? Of course it means every year, it’s actually a good idea to check for a better deal on your bills. The best ones to look around for include electric and gas, and car insurance.
With electric and gas, especially in the UK, prices tend to vary. At the end of the day, what they provide is pretty much the same. But if you don’t use much electric in a large house for example, you could be overcharged. So the best thing here is to review your contract near the end and switch to a cheaper supplier if possible.
Another example works with car insurance. My first year after I passed my driving test cost me about £1270 or nearly $1800 annually. The first year is always expensive, and this only covered 3rd parties, theft and fire. In the second year, it cost about the same. But in the 3rd, I decided to shop around. I was very surprised what I found.
I searched for full cover and found it could cost me £500/ $700 a year instead! That’s over 50% less than before. So I decided to leave my old insurer who was going to raise my premium in the next year and bought a new car insurance that was cheaper and better!
I think the moral is that laziness can sometimes cost you more money.
Get Rid of Unused Services
You can identify and stop subscriptions for anything you’re not really using anymore. Recently, I have found I don’t really use Amazon for anything. I had Prime and was paying for it every month.
Since Amazon is pretty lenient in rejoining its Prime service, I decided to cancel it while I wasn’t using it. There, money saved.
Another thing was buying a cheaper SIM only phone deal. I used to pay £25/$35 for my phone bill, mainly for mobile data. Since I have home WiFi and I don’t use much at work, I have switched to a cheaper network paying only £5/$7 a month instead. This is already saving me more money that I didn’t need to spend.
It may seem like little amounts every month, but remember that they add up over the months.
Pay A Subscription In Full
The last thing you can do is pay for something in one big amount and hopefully forget about it for a year. For example, in the UK you can pay council tax and TV license for a year upfront instead of monthly.
I would say it’s more worth it for certain bills. Including what I mentioned previously, services like Disney Plus offer this payment. It actually works out cheaper than monthly payment for these, since they normally add interest for spreading out your bill.
So over 12 months, you could save money when you pay upfront.
Now, not all services offer upfront payment. Electric and gas bills don’t, and nor do Netflix and Spotify. The only service that is beneficial to pay monthly is actually your broadband internet bill. Generally, they come out cheaper, particularly if you get a longer contract. That is the only catch. But otherwise, where you can afford it, paying a bill in full can save on those additional interest fees.
So these are the 6 methods I’ve practiced so far in order to save some money in our lives. We haven’t cut lots, but we are definitely more aware of our spending habits. With this info, we can improve our financial situation little by little, by making smarter decisions with how we handle our money and bills.
I hope this will give you some ideas, or if you have some more great ideas, please add them in below!