Clare Seal is the creator of the My Frugal Year Instagram account, founder of The Financial Wellbeing Forum and author of Real Life Money: An Honest Guide To Taking Control Of Your Finances and The Real Life Money Journal. She works to address the deeper causes of debt and financial difficulty, discussing how mindset, privilege and circumstances contribute to our financial lives and emotional wellbeing, giving guidance on how we can resolve money worries for good. Each week, she will be answering the most pressing financial questions from our GLAMOUR Money Matters Facebook Group (if you’re not a member yet then why the hell not?). This week, she shares a guide to making your money go further.
10 ways to make your money stretch further
There can be very little doubt that the pandemic has awakened us all to how precarious our finances are, even if we haven’t lost income, with women hit the hardest. In May 2020, a survey by The Women’s Budget Group showed that a huge 84 per cent of young women were worried about their financial future, with the same report showing that by October 2020, 1.5 million had lost income because of the pandemic.
The situation is worrying, but if there is one silver lining, it’s that this new-found awareness of how quickly our financial situation can change has made us engage more with our money, and start planning for the future. In a recent study by credit reference agency Equifax, 84 per cent of people said that 2020 had changed the way that they would manage their finances going forward – but what changes can we make to help our money go further? Here are a few:
1. Give yourself a financial MOT
Early in the year is a great time to dust the cobwebs off all of your accounts. Give yourself a couple of hours to lay all of your financial information out in front of you, from your credit card statements to your utility tariffs. Open your banking app and look at your transactions from the last six months. If there’s anything you haven’t been paying close enough attention to, you should be able to spot and fix it now.
2. Cut unused or underused subscriptions
While looking through your statements, you might notice a few repeating subscriptions that you either don’t use or no longer appreciate – a fitness membership, streaming service or beauty subscription, perhaps. Cutting these can save you a lot over the course of a year, but often if you ask to cancel, you’ll be offered a discount, so it might be good to check even on regularly used services.
3. Use a switching or comparison service to reduce your bills
As with your subscriptions, things like utilities and insurance can start to get expensive if you let contracts roll on without changing providers. Use a comparison or switching service to quickly see if you could be saving money. If there’s a saving to be made, you could even go one step further and set up a standing order for the monthly difference to go into a savings account.
4. Live with a budget
Notice that I said ‘with’, not ‘on’. Life on a budget is not an appealing idea to anyone, long-term, but your budget should be something that you live with for life. All your budget is, is knowing what’s coming in, what’s going out and what you plan to do with the rest. Start by recording your income vs your outgoings, and work out where you’d like to allocate your disposable income according to your own priorities. A good rule of thumb is the 50-30-20 rule: 50% of your income on bills, 30% on enjoyment and 20% into savings, but you can alter this ratio to make it work for you.
5. Have a realistic meal plan
Meal-planning and batch cooking are two of the best ways to save money on food, but it can be tricky to get right. If you don’t have much spare time, cooking from scratch each night is not realistic. Make sure you include some quick wins and store-cupboard options in your plan, and check out the great budget recipes from Miguel Barclay and Jack Monroe, most of which just have a few ingredients.
6. Practice mindful spending
Most of us spend on impulse at least every now and again, and often little purchases can sneak in and ruin your budget without you even really noticing. A good way to counteract this is by practising mindful spending – make sure that you are making a conscious decision to spend by always giving yourself enough time, sleeping on any bigger spending decisions and disabling super-fast payment methods like face ID and thumbprint payments. Often the act of typing in a long card number is enough to remind you that you don’t necessarily even want the item.
7. Use an auto-saving app
These clever little apps have revolutionised saving from many people. Instead of transferring a large amount at the beginning of the month, you can allow them to make savings from your current account in small chunks, siphoning off small amounts every few days and stashing it away in an easy-access account. The money soon adds up, and it’s a great way to save for things like Christmas and birthdays.
8. Check cashback sites
If you’re making a moderate to large purchase, buying new insurance or booking a holiday, always check a cashback site or app to see if you can claim some of the money back. Even small percentages add up on bigger items, and again, you can put that cash straight into your savings for a nice boost.
9. Sell for self-care
Making a habit of giving your possessions a spring clean every couple of months is a great way to keep your home looking fresh, and to make some money at the same time. If there’s anything you’re not using or wearing, list it on a selling site and see if you can earn some cash. The benefits of this are triple-fold: you get some extra money, you gain space in your home or wardrobe, and you contribute to the circular economy. Similarly, if there’s something you’ve been coveting, why not check to see if you can buy it second-hand for cheaper?
10. Save up loyalty points
Loyalty points are quite old-school, but schemes like Nectar, Tesco Clubcard and Boots Advantage points have been benefiting customers for years. See if your supermarket has a loyalty scheme and don’t forget to collect them on things like petrol, too. Over a year, you could save enough to get a whole grocery shop for free, or to treat yourself to some new skincare without spending a penny.
If you’ve got a topic you’d love Claire to tackle, be sure to join our GLAMOUR Money Matters Facebook Group and post to let us know.