How to Be Frugal – 10 Top Tips from Our Panel

Written by Karen Bryan

how to be frugalIn preparation for the Frugality Tips Live Blog on Wednesday 15 February 2012, I asked the panelists to email me their top three tips on ways to save.  I then collated the ten top tips on how to be frugal into a round up of the panelists’ tips.

How to Be Frugal Podcast

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Budgetting

Making a budget is the crucial first step to being frugal. You have to know what money is coming in and going out. There are different methods of preparing a budget, I favour my notebook, some people like spreadsheets. When working out your budget you need to be realistic, as it’s easy to under-estimate some expenses, e.g. nights out but including the taxi home and Christmas gifts for a long list of family and friends.

Concentrate on the Biggies

There’s more potential saving in cutting back on your major expenses such as housing and running a car. If you moved to a smaller house and/or a cheaper area, you’ll probably save money on council tax and heating, as well as lower rent and mortgage payments. If you pay off your mortagage, you could save thousands of pounds in interest charges.  If you keep your old car for another two or three years, you’ll avoid losing money through depreciation.

Share Skills & DIY

Learn to do some tasks yourself and pool skills with family and friends, e.g. plumbing, hairdressing and gardening to save on expensive bills to professionals. I cut my own hair but I’m not sure my friends would let me loose with a pair of scissors. We clean our own windows and I do my own accounts.

Plan Meals & Shopping

There’s a lot of food waste if you don’t carefully plan your meals and keep an eye on the dates of perishable foods. You could try using shops’ own brands and/or value lines, some of the products are still good quality.  You can do grocery shopping online through the MySupermarket price comparison site.  Another way to save on food is to take your lunch to work.

Recognise & Control Your Spending Triggers

Most of us have financial slip ups every so often, but don’t despair and get back on track as soon as possible. Try to work out what triggers over-spending, is it when you’re sad, happy, do you spend to save when you spot bargains? Once you recognise the triggers you’ll be better prepared to have diversion tactics in place. Instead of going shopping and spending money, do something that you’ll still enjoy and/or could earn you money e.g. try you hand at being a blogger, or be creative and make some birthday cards etc.

Focus on Quality of Life

Try to think of creative ways to save on boring things that don’t make too much impact, before you end up losing out on quality of life in drastic cutbacks. If you ignore the fact that your household books don’t balance and there’s more money going out than coming in, things can only get worse as debt mounts.

Swap Clothes

Why not arrange a clothes swap (a.k.a swishing) party so you can to get “new” and different outfits without spending any money? Most women have some clothes lurking in their wardrobe that are virtually unworn and could appeal to someone else.

Shop Around for the Best Deals

Don’t just renew you current home/car/life insurance with your current provider do a bit of research to see if you can find a better deal.  Check out what’s on offer from the various gas and electricity suppliers. Phone your current supplier to ask for a better deal; I recently got a 15% discount from BT. It’s all about getting the most from money.

Prepare for Christmas Spending

Stock up on Christmas gifts whenever you spot bargains, this could massively reduce your Christmas spending. Rather than putting money aside into a Christmas Club, where it earns no interest and you are restricted to buying goods at specific shops, some building societies (e.g. Yorkshire) offer a Chrismas Saver account with a pretty decent fixed interest rate of 3.5% for balances up to £1200. There’s a penalty if you withdraw money before 1 December.

Make the Most of Free Services

UK state museums are free of charge to enter and they are great weather proof days out. Why buy a book when you can borrow it at your local library or get a free download to your Kindle?

Use Your Tax Allowances

Make sure that you don’t pay more tax than you need to. If you have savings keep them in tax free Cash ISA. If a couple have both used their Cash ISA maximum,  a non working spouse could have the rest of the savings in their name to utilise their personal tax allowance. Whereas if the savings were in joint names, the working spouse would have to pay tax on half the interest.

The Panelists

A big thank you to the panelists for thier contrubutions.

This article was included in the Totally Money Carnival #54.