Hi Rosie, money is quite tight for me at the moment and I’m at home most of the time because of the lockdown. Got any good tips to help me cut back my spending?
What a strange time we’re living in at the moment. With so many of us spending so much time at home right now, some might think we’re all saving money as we’re unable to eat out, go to the cinema etc. However, it’s easy for household costs to creep up while you’re at home. And, if your income has taken a hit due to the emergency, you may need to reassess your spending. So here are my tips for cutting spending while you’re in lockdown.
Check your direct debits and ditch unused subscriptions
While you’ve got the time, go through your bank statements and see if you’re paying for anything you no longer use, such as magazine subscriptions. If you are, consider canceling them.
With gyms closed, many chains including PureGym, Nuffield Health and The Gym Group have frozen or extended memberships automatically and you don’t need to take any action, but if you’ve got a membership and haven’t heard from yours by now, you should get in touch to see what it’s doing.
Cut your energy bill despite spending more time in
Energy usage is expected to spike while people are in lockdown, but there are lots of things you can do to pay less, for example:
- Switch provider - this is a big one, and could save you £100s, especially if you haven’t switched recently and are languishing on your provider’s standard variable tariff. You can do an online comparison for example with MoneySavingExpert’s Cheap Energy Club to see which provider would be cheaper, and switching is easy and hassle-free.
- Turn the heating down (or even off), if it’s not too chilly. Social enterprise, the Energy Saving Trust, estimates you could save £80 a year just by turning it down one degree. You might not want to turn it off all the time, but you could see if your home stays warm enough without it always on. For reference, the Energy Saving Trust says homes should generally be between 18 and 21 degrees Centigrade.
- Unplug unused devices and switch off standby - if you leave your laptop charging all day or your TV on standby, unplug them or turn them off at the socket to save some electricity.
- Only use what you need in the kitchen - don’t overfill the kettle or use bigger pans than you need, as these waste energy by heating excess water.
Save on broadband and mobile costs
While you’re at home all day, it’s likely your internet use will shoot up, and you may well be using your mobile more often for calls too - although there are lots of free ways to talk to friends and family if you’re on Wifi, such as FaceTime, WhatsApp calls, Google Hangouts and Zoom. Some mobile providers are giving free extra minutes and data to their customers at the moment, so it’s worth checking with your provider, if they haven’t already contacted you.
It’s also worth seeing if you can make a saving by switching to new providers. If you’re out of contract you’re probably paying over the odds. You could also contact your existing provider and try haggling the cost down. There are websites which show you some of the best deals currently available, where you can look for new providers, or find offers you can use to help you haggle. These include uSwitch or moneysupermarket.com.
Stop unnecessary online shopping
It can be very easy when you’re stuck indoors with little to do, to go online and splurge - I’ve been tempted myself to do some shopping just to pass the time.
However, before you buy anything think about whether it’s something you would have bought were you not at home all day, and whether you actually need it. Try waiting 24 hours and seeing if you’re still tempted. You may often find you’re not.
Reclaim travel costs
If you’ve a season ticket or upcoming train tickets then you should be able to get a refund for what you haven’t used without any of the usual admin fees. Contact your train company or wherever you bought the ticket to get your money back.
If you had travel abroad booked in the next few weeks including flights and hotels, you should now be able to get refunds for these, or get your insurance to pay out, as the Foreign and Commonwealth Office has warned against all non-essential travel from the UK. If your trip is later but you still want to cancel, you may be able to get a refund so it’s worth checking. Starling has a blog on coronavirus and the chargeback process, which provides more information on the area of travel.
Save the money you’re not spending on going out
If you regularly spend £15 a week on lunches out or £30 on a Friday round of drinks, put that money into a separate savings account. For example, Starling lets you set up Goals which act as individual places you can move money into, to keep it out of your main account. That should decrease your chances of being tempted to spend it on other things.
Draw up a budget
While you’ve got the time, it’s also worth taking a look at your whole financial situation and making a budget if you don’t already have one. This may be harder at the moment if you’re uncertain about your income, but it could still help you have an idea of your usual spending and see where you can cut back if needed. Here’s how:
- Figure out what you spend in a year - it’s important to do it over more than just a month so you get a full picture including big one-off expenses like holidays and Christmas. There are tools online to help you like this one from the Money Advice Service, or you can create your own spreadsheet or even go down the old-fashioned pen and paper route. Choose whichever way best helps you visualise your spending.
- Set up a budget for the year, with target amounts of what you want to spend in various categories. It may also help you to work out a monthly budget for the next few months, especially in these uncertain times.
- Track what you’re spending - this will likely be different to your normal spending at the moment, but it’s good to get into the habit of doing it. Starling gives you a monthly breakdown for various categories in the Spending Insights tab, or you can choose to write everything down yourself.
One way to help you manage your money once you’ve set up your budget is the Piggybacking technique. Here, you set up different money buckets or pots for each of your main spending categories - bills, holidays, groceries etc - Starling’s Goals can help with this. You fill the bucket according to what your budget says you need. Then when you have a bill or need to spend on something, you should have it available under the category you created, whether that’s bills or groceries.
Hopefully these have given you some ideas of ways to bring your household costs and other expenditure down, whilst you’re spending more time at home right now.
Send your money questions to AskRosie@starlingbank.com