Find Financial Freedom

With the credit crunch having turned into a recession, I’m sure there are many out there that are wishing to cut down on everyday expenses, so here’s my tips for frugal living. However, don’t think that being more frugal is the only way to beat the recession - the optimum strategy to beat the recession is to play a good offence and a good defence. So cut your costs down by following my frugal living tips, but also look to increase your income by following these simple ways to make money online.

Frugal Living Tip # 1

Downgrade to a less expensive supermarket than you usually shop at. In the UK, the conventional wisdom is that the most expensive supermarkets are Waitrose and Marks & Spencer, with the cheapest being the Aldi’s and Lidl’s of this world. So to make a huge saving, stop shopping at M&S and start shopping at Aldi. If you want to make a modest saving and you usually shop at Sainsbury’s, try shopping at Asda or Morrisons for a few weeks - you’ll notice a difference in the price of your shopping and the quality is comparable, in my opinion.

Frugal Living Tip # 2

Take a keen interest in the prices of petrol/diesel at your local garages. The variation in petrol prices can be pretty big, especially if like me, you fill up with premium unleaded (104.9p/litre) by accident. This was a full 10p/litre more expensive at Texaco half a mile down the road than the local Morrisons regular unleaded, which is £4.80 on a 48 litre fill up! But even comparing like for like (ie, regular unleaded with regular unleaded), the variation in price between the supermarkets and other petrol stations, even within a small radius can be quite large. Clearly it’s not worth driving an extra 20 miles just to fill up, but if you’re passing nearby, a slight detour may be worth it if it will save you £2-£3 on a tank.

Frugal Living Tip # 3

Eat in, or if you really must go out for dinner/don’t have time to cook, then get a takeaway. If you order a takeaway, you don’t pay VAT, so immediately you’re saving that 15% that would have been added on, also if you are eating a takeaway, you can buy any booze to go with it cheaply from the supermarket, rather than paying expensive restaurant prices!

Frugal Living Tip # 4

Take sandwiches/packed lunch to work. I find that when I don’t prepare a lunch to go to work, I end up buying rubbish or spending more because I am shopping in more expensive shops than I would do my everyday grocery shopping at. If you make your own lunch each day, you could save £10 - £15 a week, which is a significant saving over the course of a month.

Frugal Living Tip # 5

Examine all your monthly direct debits to see firstly how much you are spending each month and secondly to identify which ones could be switched to cheaper suppliers. I did this recently and found that I was paying £35 a month for a mobile phone contract which supplied me with more texts/minutes than I ever used. I’ve now downgraded to a cheaper deal (with the same supplier) and am saving £15 a month.

I got rid of Sky TV and bought a free to air box, am saving £37 a month that I used to pay to Sky. Clearly if you are a big football fan then this will be painful, but it does give you more excuses to go to the pub - but make sure you only have a squash and don’t spend the money saved on Sky on beer instead!

I wear contact lenses, and couldn’t do without them (I’m as blind as a bat otherwise), so what I did was shop around and find a supplier on the internet that will supply my contact lenses and solutions for £15 a month, compared to my optician that was charging me £33.80 a month.

And of course, it goes without saying that you can switch your home insurance, gas, electricity, water, telephone, broadband - just make sure you are getting a better deal, this can only be calculated by reading the small print of each deal to ensure there will be no hidden surprises!

Lastly, as an ex-mortgage broker, I’m going to recommend that you don’t use your trusty mortgage broker when buying your life insurance or other protection products. Instead, get some quotes from them, this will ensure you get the correct amount of cover for your needs etc etc, but then go and buy from an online broker that strips out the commission (about 30-40% of the monthly premium) and instead charges a small fee (£30-£50) to set the policy up. A company I used was Cavendish Online and they were very efficient.

With the credit crunch meaning everyone is looking for ways to save money, it struck me that there are still lots of people that waste their hard earned cash on “lunches” everyday at work. Only the other day, the plumber that was in to fix our bathroom nipped out at lunch time to buy himself a sarnie and a drink. No doubt he spent at least £3 on a sandwich and a bottle of coke from the local shop, if he does that everyday of the week, he’ll be spending £15 a week on lunches!

Now it shouldn’t take a genius to work out that you can make your own sandwiches for much less than £15 a week, so you could easily save money each week by doing so. Ok, it does take time to make your own, but if you get into a routine of doing every evening when you’re making your dinner, it’s really no fuss at all.

There are other ways you can make similar savings, for instance, if your office or workplace has a coffee machine, don’t spend money buying a coffee or tea, just take your own coffee / teabags into work and make your own.

I wrote a similar post on my other blog recently, which was called make your own supplements to save money, and it’s the same issue with supplements. You can buy all the raw ingredients and mix your own shakes for a fraction of the price of the big brands, but for some reason, countless people get sucked into splashing the cash on expensive, well known brands, either because they think it’s better or simply because they can’t be bothered to mix them up themselves.

In my experience, businesses are either run by frugal people who have keep a close eye on expenditure, trying wherever possible to keep costs as low as possible, or they are run by people who don’t worry too much about what they are spending, because they concentrate on generating a large turnover and hope that this will be larger than their inflated running costs.

I can kind of see the logic in this, though something I picked up from reading “The Millionaire Next Door” is that to really be successful in business, you should place equal emphasis on both aspects of your business. In essence you should try to maximise turnover and minimise costs, to therefore maximise profit.

As such, I decided to come up with some money saving ideas for businesses.

Offices/Premises

In reality, the office or premises that a business operates from is a neccessity, but it does not have to be regarded as a luxury, as many big corporates believe. The evidence of this can be seen in any city centre, where you will find big lavish office buildings housing various firms. They must spend a fortune on these offices, not just because they are city centre, but also because they are flashy, and that costs money.

Even the government are guilty of this, take the Financial Services Authority for example, they are funded by the fees levied against regulated financial services firms, something in the region of £200m a year, and they blow this on a very fancy head office in London’s docklands. They could reduce the fees levied each year and move the HQ to Barnsley and save a fortune.

Company Cars

The amount of money companies spend on car fleets is astronomical, mainly because they buy or lease brand new cars, and so pay the lion’s share of the depreciation. They would save a fortune if they bought the cars three years old and sold them once they were five years old, in effect get some other sucker to pay for the depreciation. But I’m sure there are good reasons why they have to have brand new Mondeo’s and Vectra’s, I just can’t quite work it out…

Expensive Marketing

How many companies that you see advertised on TV or in magazines, newspapers etc do you think ever really see a return on the amount of money they spend? I bet most of these firms pay large marketing agencies huge sums of money to come up with ideas for their brand or various products/services, and I’m sure the whole process for the client is very lovely, but in terms of value for money I bet it’s pretty poor.

I have in the past done some affiliate marketing, and when I was a mortgage broker, I worked on commission only, so I know about marketing from the sharp end. I bet if the marketing agencies that are retained were given the option to earn a commission on only the extra sales that their campaigns generated, they would run a mile.

My theory is that it’s very easy to spend thousands of pounds of someone else’s money without really worrying about the outcome, but if they actually had to be accountable for the money spent and the results, it would be a different story.

I’ve even heard anecdotes of companies that have cancelled profitable affiliate marketing campaigns because a marketing budget had been slashed…how bonkers is that? With affiliate marketing, you only spend money on the marketing if you make a sale, it’s win win! To arbitrarily cancel an affiliate marketing campaign because the overall marketing budget has been slashed is completely stupid. If anything, they should slash wishy washy TV/magazine/radio/newspaper advertising that doesn’t generate results and move any affiliate or commission only sales out of the marketing budget.

 

If you’re anything like me, the thought of frugal living doesn’t exactly inspire you, so I thought it would be a good idea to do an article about ways to make money saving tips, fun or funny to be precise. Here are some ideas I read about on the web or in magazines over the past few months:

John wrote a funny article about reduce your monthly outgoings by going down the gym, it’s not exactly that serious but it can save you money on your home heating, washing and showering bill.

Another idea is to wash your car when it’s raining - thus using non of your own water, you will get wet, but think of the pennies you’ll save!

Take your wife/girlfriend/husband/boyfriend out to dinner - have a very expensive meal, then complain vehemently about the standard of the food, the service, the wine - you should get all or if not all, some of the bill taken off, in return for you shutting up!

If you’re single - go out on lots of dates with people that you normally wouldn’t be seen dead on a date with, then pretend you forgot your wallet, they’ll be so glad you agreed to come on the date, they’ll pay for you!

For our American readers, become an illegal alien - renounce your US citizenship, move to Mexico, then sneak back into the US. You’ll be entitled to many free benefits including healthcare, housing and shooling for your kids!

Buy an owl (electricity monitoring kit) - you’ll get so obsessed with how much you’re spending on electricity that you’ll lose all your friends, won’t have a social life anymore and save a fortune - you’ll probably save some money on your electricity bill as well!

Live life on the trailing edge - downgrade to a VHS cassette player, you’ll find that your local charity shop has plenty of bargain films for you to buy, the only downside is that you won’t be able to watch anything newer than the year 2000!

Drive like a pensioner - driving slowly will save you money on your petrol bill, but will also result in more people crashing into the back of your car, thus meaning you get a new rear end or if you’re lucky, a whole new car every six months or so!