Top 5 Ways to Save Money During a Recession
With the UK officially in a double dip recession, money is on everyone's minds.
Here are 5 easy tips to keep control of your finances and ride the tide of the latest economic turmoil.
1) Live within your means You may have a good idea of your income, but how often do you sit down and make a detailed list of your outgoings? Most of us hugely underestimate the amount that we spend during the year.
A good way to get an idea of your cash flow is to monitor your spending over a month by keeping a detailed spread sheet.
Rather than waiting until the end of the week to collect your receipts together, set aside 10 minutes each evening to make a note whilst the day is fresh in your mind.
This may be time intensive, but you will quickly get used to the routine.
Once you have analysed your monthly outgoings, you will be able to produce a realistic budget.
When making your budget, don't forget to set money aside for birthdays, summer holidays and Christmas.
You may have to sacrifice other luxuries in those more expensive months to come in under budget, but it will be worth it in the long run.
2) Make budget cuts Once you have your budget in front of you, look closely at what you spend and see if you can make any reductions.
For example, if you regularly visit restaurants for dinner you may have to sacrifice these outings in order to save some money.
In addition, look to see whether you can spend less on what you buy already.
Groceries are one way you could cut back.
By making a meal plan at the start of each week, you will know exactly what food you need to buy that week and will be less likely to waste unused food- there are many cheap recipes online for you to take inspiration on.
Another handy way to make budget cuts is to use a comparison website to save money on your bills, insurance, broadband and gym costs.
For example, if you have health insurance it might be worth comparing the market to see if you could switch to a cheaper policy without losing cover.
Even if you only save a few pounds a week on things like gas, electricity and insurance, it will all add up to a tidy sum by the end of the year.
3) Conserve energy at home There are some simple home checks you can carry out to make sure you are not paying more than you need to on your bills.
Turn your thermostat down by just a few degrees to cut your heating bills.
Always turn off the lights if you leave the room.
Don't leave electrical appliances on standby.
Fix a leak before you waste water.
Switch to energy saving light bulbs.
Install a water meter- water meters measure the exact amount of water you use, rather than relying on estimates.
One you have carried out these steps you could save a nice little monthly sum.
4) Prepare for an emergency by saving Once you have analysed your budget and identified places you could cut back, calculate how much money you could save on a monthly basis by living a cheaper lifestyle.
Invest this money in a high interest savings account each month.
Even if you only save £100 a month for a year, this will still provide you with a handy £1,200 in an emergency.
At times of financial crisis, this can be a comforting buffer.
Saving accounts can be compared online like everything else, so you can ensure that you get the best interest rate.
If you want advice on other saving methods like savings bonds of cash ISAs, speak to an adviser from your bank.
5) Protect your income and mortgage If redundancy is on your mind, there is an easy way to protect yourself from suffering financially if you did lose your job.
Unemployment cover is designed to pay you a portion of your monthly income for up to 12 months if you were made redundant.
By paying a monthly premium to your insurer, you will protect up to 70% of your annual gross income.
Unemployment cover does not have to cost much, and it can give you great security when the country is at a time of economic turmoil.
Rather than relying on savings or government benefits if you lost your job, you would have a tax free monthly benefit to give you time to find employment.
This money can be used however you deem appropriate.
Similarly, if you are a homeowner, meeting the cost of your mortgage payments can be a large financial burden.
Mortgage payment protection insurance is a type of income protection insurance designed to pay your mortgage if you cannot work due to accidental injury, sickness or unemployment.
An MPPI policy is designed to cover the whole cost of your mortgage, but you can choose to cover as much or as little of the cost as you want.
Like employment cover, mortgage payment protection insurance will usually only pay out for 12 months.
These simple steps will save you money and make sure you are prepared for the worst in the middle of the financial crisis.
Here are 5 easy tips to keep control of your finances and ride the tide of the latest economic turmoil.
1) Live within your means You may have a good idea of your income, but how often do you sit down and make a detailed list of your outgoings? Most of us hugely underestimate the amount that we spend during the year.
A good way to get an idea of your cash flow is to monitor your spending over a month by keeping a detailed spread sheet.
Rather than waiting until the end of the week to collect your receipts together, set aside 10 minutes each evening to make a note whilst the day is fresh in your mind.
This may be time intensive, but you will quickly get used to the routine.
Once you have analysed your monthly outgoings, you will be able to produce a realistic budget.
When making your budget, don't forget to set money aside for birthdays, summer holidays and Christmas.
You may have to sacrifice other luxuries in those more expensive months to come in under budget, but it will be worth it in the long run.
2) Make budget cuts Once you have your budget in front of you, look closely at what you spend and see if you can make any reductions.
For example, if you regularly visit restaurants for dinner you may have to sacrifice these outings in order to save some money.
In addition, look to see whether you can spend less on what you buy already.
Groceries are one way you could cut back.
By making a meal plan at the start of each week, you will know exactly what food you need to buy that week and will be less likely to waste unused food- there are many cheap recipes online for you to take inspiration on.
Another handy way to make budget cuts is to use a comparison website to save money on your bills, insurance, broadband and gym costs.
For example, if you have health insurance it might be worth comparing the market to see if you could switch to a cheaper policy without losing cover.
Even if you only save a few pounds a week on things like gas, electricity and insurance, it will all add up to a tidy sum by the end of the year.
3) Conserve energy at home There are some simple home checks you can carry out to make sure you are not paying more than you need to on your bills.
Turn your thermostat down by just a few degrees to cut your heating bills.
Always turn off the lights if you leave the room.
Don't leave electrical appliances on standby.
Fix a leak before you waste water.
Switch to energy saving light bulbs.
Install a water meter- water meters measure the exact amount of water you use, rather than relying on estimates.
One you have carried out these steps you could save a nice little monthly sum.
4) Prepare for an emergency by saving Once you have analysed your budget and identified places you could cut back, calculate how much money you could save on a monthly basis by living a cheaper lifestyle.
Invest this money in a high interest savings account each month.
Even if you only save £100 a month for a year, this will still provide you with a handy £1,200 in an emergency.
At times of financial crisis, this can be a comforting buffer.
Saving accounts can be compared online like everything else, so you can ensure that you get the best interest rate.
If you want advice on other saving methods like savings bonds of cash ISAs, speak to an adviser from your bank.
5) Protect your income and mortgage If redundancy is on your mind, there is an easy way to protect yourself from suffering financially if you did lose your job.
Unemployment cover is designed to pay you a portion of your monthly income for up to 12 months if you were made redundant.
By paying a monthly premium to your insurer, you will protect up to 70% of your annual gross income.
Unemployment cover does not have to cost much, and it can give you great security when the country is at a time of economic turmoil.
Rather than relying on savings or government benefits if you lost your job, you would have a tax free monthly benefit to give you time to find employment.
This money can be used however you deem appropriate.
Similarly, if you are a homeowner, meeting the cost of your mortgage payments can be a large financial burden.
Mortgage payment protection insurance is a type of income protection insurance designed to pay your mortgage if you cannot work due to accidental injury, sickness or unemployment.
An MPPI policy is designed to cover the whole cost of your mortgage, but you can choose to cover as much or as little of the cost as you want.
Like employment cover, mortgage payment protection insurance will usually only pay out for 12 months.
These simple steps will save you money and make sure you are prepared for the worst in the middle of the financial crisis.
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