There are lots of ways to save money. Heck look at how many hundreds of personal finance blogs write about different methods everyday!! That amounts to a LOT of ways! The question one would ask is where do I start and how do I prioritise? Let me put this in perspective: lots of people procrastinate about not buying a coffee here and there, yet claim that they are saving money when they drive around massive fancy cars with expensive repayment loans and dreadful economy. It doesn’t take a genius to work out the priorities are all wrong. I say drink your coffee if the taste of Starbucks own paper cups and syrup makes you happy. Im serious… If buying coffee really improves your mood and enhances your day- go for it! I explain why in my post ‘defining purpose and the importance of moderation (which continues to be the most popular post on this site). In order to prioritise you need to look at your own personal situation. Everyone of us is unique in this sense. To Highlight the point, I will discuss four Changes that I have made / am due to make which have made a substantial difference to my finances

1 – Choosing the correct phone contract.

Smartphones are expensive. They are very expensive. You only need to walk into the Apple store to see the iPhone on display for about £500 to realise that this cost is incorporated into your contract with your ‘free’ handset. I’m not saying don’t get one – just take care when choosing a contract. It can sometimes be cheaper to purchase the phone outright and get a ‘SIM only’ contract. If this is not an option, be sure to downgrade your contract as soon as you have met the requirements (usually 18 or 24 months). You can then use your existing handset that you have now paid for. Currently my contract amounts to £50 per month, for 18 months. In 6 months when I am ‘out of contract’ I will immediately be transferring to a sim-only contract which works out at about £15 per month, in addition to £60 cashback when you sign on for 12 months (making it the equivalent of £10 per month). Total saving – £40 per month or £480 per year – factor in that Mrs Scot has the exact same contract, this will be £80 per month or £960 per year – A significant difference!

2 – Taking care of the finances themselves

This one involves choosing the financial products that you use carefully. If you have a large amount of savings, it is worth doing a thorough search of the savings offers available. Too many people leave their money in accounts with 0.1% interest, ignorantly thinking they are ‘saving’. Don’t settle for uncompetitive rates. Remember to take full advantage of your interest free savings options in the UK (ISA). Secondly, ensure that your regular current (or checking) account offers something above and beyond standard service. There are countless options when searching for current accounts that include additional extras. These additional features can include insurance cover, breakdown cover etc. You can quite often get cover for your mobile phone which links in to additional insurance premium savings. For me this saves £10 a month on iPhone insurance!

3 – Watch your spend on Food

Eating is something that we all do (at least) three times per day and have no option but to spend money on. We can cut out expensive cars and cable subscriptions, but we can’t cut out food. This is one that takes a LONG time to master. I would recommend reading the post 5 Top Tips for Saving Money on Food. Combine this with limiting the amount that you go out to eat and you are on to a winner! We try to keep below £70 a week on food (including going out). Some people can spend £70 on a single dinner out – countless times a month!

4- Energy Bills

This one is a killer… Especially in winter! Take it from a Scottish guy – it gets cold! Ensure that you set the heating timer correctly and take full advantage of the advanced programming features. It doesn’t make sense to have the heating on at the same time during the week when you are at work than at the weekend. Equally timings should change with the seasons. Turn it down when you are away for weekends; or off completely! Sometimes this will involve turning off the ‘Hot water available’ mode too. Every meter is different. Use Energy saving bulbs, don’t boil a full kettle of water for a single cup of tea – or let the oven heat up too early! Use common sense! Too often we see energy as something we ‘just have to pay for’ when really you can cut the bills substantially! Consider insulating your loft and take care of government schemes if they are available. Sometimes you may even benefit from switching energy companies and subscribing to a fixed rate. These four areas were highlighted by simply looking at where I spend the Most money each month. Other than housing expense, What are your top 4 outgoings each month? Image credit – thegoodwebguide