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How to Save Money

You could save thousands a year by paying more attention to small items of expenditure. Not convinced? Read on.

Have you got a colleague who brings a packed lunch into work everyday? If so, do you look on in admiration at their fiscal soundness and their apparent willingness to forego precious moments in bed in order to construct their prandial treat? Or do you perhaps wonder why they bother given that there's a good sandwich emporium round the corner from your office?

The fact is that the packed lunchers are spending around a quarter of what it costs the rest of us to feed our faces at lunchtime. If they're saving around £3 a day, that's probably not a big deal in itself. But taken over a year, they could be saving well over £700 of disposable income, so maybe £1,000 of pre-taxed income. That's around 4 per cent of an average annual salary in the UK.

You can see where this is heading. Take the small opportunities to reduce expenditure and big savings can follow. It's a bit like the financial equivalent of chaos theory, only instead of butterflies flapping their wings and hurricanes resulting, we have Mars Bars foregone and bank balances blooming.

I quite like the packed lunch example, but I accept that not everybody would regard the effort involved in making their own lunches as a reasonable trade-off for the money saved. So it's worth recognising that there are ways of achieving decent savings that involve less effort. Here are a few possibilities:

Reduce the number of magazines and newspapers you buy.
Review the need for any subscriptions you have, particularly those that are renewed by direct debit.
Weekday drinking. If you're prone to having a bottle of wine with the meal every night, and it's costing you a fiver a bottle, you could save over £1,000 per annum by giving it up from Monday to Thursday. (You would also impress your GP at your annual health check-up with the seismic drop in your alcohol consumption.)
Chocolates, cakes and crisps. Cut 'em out and earn the gratitude of your bank manager and your waistline.
CDs, DVDs and books. Own up, when did you last watch your DVD of Fawlty Towers, The Phantom Menace, or Series One of The Office?
Reduce your travel costs. Consider cycling to work, walk where you can.
Cut out the early morning latte on the way to work.
Spend less on clothes. Don't be a catwalk victim - wait for the sales.
Buy the own-label brands from supermarkets.
Review your phone contracts. Are there better deals around?
Eat in more often.
Don't upgrade your mobile or home computer quite so often.
Have a look at any club memberships you hold. Are you getting value for money? I cancelled a gym membership after working out that one year it cost me the equivalent of £80 a visit.
The point is that you can reduce expenditure without too many howls of anguish just by paying a bit more attention. And the benefits really are tangible - whether it's the good feeling that comes from having saved enough to afford that extra holiday or, at the other end of the spectrum, being just that bit freer from nagging, life-sapping debt.


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