If you want or need to reduce your spending because of Covid-19 but feel unsure about where to start, here are some tips that could help.
1. Switch suppliers
Many people sit on the same tariffs with the same energy suppliers for years, either out of convenience or because they think the process of switching is too complex. But they could be missing out on as much as £300 a year.
Think about it this way. You’re going to be getting the same product, no matter who your supplier is, so why pay more? If your usual supermarket started adding a fiver on to your regular shop, you’d soon be shopping elsewhere!
There are numerous price comparison websites out there, which you can use to ensure you’re getting the best deal.
Bonus tip: Setting up a direct debit with your energy supplier can save you money. Remember to perform your own meter reading whenever you get a bill. Don’t just rely on your supplier’s estimate.
Get more information on how to switch.
2. Manage your subscriptions
Did you watch anything on your online streaming service in the past month? If not, you’ve just spent money on nothing. Consider whether you’re getting the most out of your other subscriptions too – gym memberships, cinema cards, online news sites, gaming subscriptions – are you really getting your money’s worth?
There’s no sign-up fee for some services, so you could easily pause your subscription for a month or two, with no penalty. This pause will give you a chance to assess whether you really need a service or not. It’s especially useful if you’re going to be on holiday and know that you won’t be using a service for a few weeks.
3. Check your Tax Code
HM Revenue & Customs’ figures show that there are millions of tax coding errors every year. The impact of these errors soon adds up to hundreds and even thousands of pounds in underpaid or overpaid tax.
It’s important to check you have the correct tax code as you could be owed or owe significant sums. Some groups are more likely to be impacted than others. If you’ve recently changed jobs, have more than one income, receive employee benefits, have recently retired, or started a first job you’re more likely to be on the wrong tax code.
There are online calculators which you can use to ensure your tax code is correct. If you find you have overpaid, you can contact HMRC to see if you’re owed a refund. If you unfortunately find that you’ve underpaid, it’s worth tackling straight away, rather than letting the underpayment build up. You may be able to challenge the underpayment, if correct procedures weren’t followed.
4. Turn your thermostat down
Reducing your room temperature by just 1°C could cut your heating bills by up to 10%. According to the NHS if you're under 65, healthy and active, you can safely have your home cooler than 18ºC, as long as you're comfortable. If, however you're not very mobile, aged 65 or over or you have a health condition such as heart or lung disease, you should always heat your home to at least 18ºC.
By installing a thermostat timer or having smart heating controls, you can programme your heating to turn on before you get up or before you come home, which uses less energy than turning your thermostat right up to warm your house quickly. Individual thermostat valves on your radiators can also give you control over which rooms you want to heat, and what temperature you want to heat them to.
You can also reduce the need to turn your thermostat up by ensuring your home has proper insulation; in the roof, cavity walls and even solid walls. You can also put insulation under your floorboards. In addition, it’s important to deal with draughts that let cold air in and warm air out. Install draught excluders on your doors, windows and floors. You can use suitable sealant, insulating strips, wooden beading or even rolled up blankets if you’re on a budget. There are significant energy savings to be made if your home is well insulated.
You may also want to turn the thermostat on your hot water tank down to 60ºC. This will help you save on your water bill as well as electricity. That’s because you won't need as much cold water to make your bath or shower nice and warm, rather than too hot. You may also want to consider insulating your water tank, as this can help keep your water hotter for longer.
5. Wash your clothes at 30°C
Unless you have a specific reason for doing so, washing your clothes at a high temperature isn't usually necessary these days. Most laundry detergents are designed to work effectively at 30ºC or even lower.
Using a tumble dryer may be a necessity during the winter months, but you can try to save on drying time by wringing your clothes out thoroughly before putting them in the dryer. You may also want to try using dryer balls, which work by lifting and separating your laundry when it's drying, reducing drying time by up to 25%.
6. Plan ahead
Before you go shopping, plan out the meals you want to cook in the coming week and make a list of the ingredients you'll need. Better yet, check what you’ve already got in your cupboards, fridge and freezer before you start planning. There’s a good chance you have unused food that needs to be eaten. If you’re stuck for ideas of what to do with the ingredients you already have, myfridgefood.com can help you find recipes to use them in. By having a weekly meal plan you’re more likely to avoid the temptation of ordering a takeaway.
Remember to plan out your lunches as well as main meals, especially if you work full-time. You can save cash by making your own lunch rather than spending money on sandwiches every lunch time.
It can be difficult, but try not to buy anything that's not on your list while you're shopping. Apply a similar strategy to shopping elsewhere, whether online or in store. A jumper reduced from £30 to £15 may look tempting, but if you have no need for it and won’t wear it often, that’s £15 that you could have used elsewhere.
Also, sticking to supermarket own brand versions of certain food stuffs, or better yet making your own from scratch, can save you even more.
7. Buy what you need
Try not to buy lots of fresh fruit and vegetables at the same time, because you may not be able to eat them all before they go off. Just buy enough for the next day or two. And remember, canned and frozen fruit and vegetables are usually cheaper than fresh, and just as nutritious.
Alternatively, you could try growing your own fruit and vegetables. Even if you only have a patio, many types of fruit and vegetables can be grown in containers and pots. Farmer’s or local markets are also great for fresh, in-season food and you might find you get more for your money!
8. Get money back
A lot of companies now use loyalty or rewards cards which allow you to collect points when you spend, and then swap those points for money off future purchases or free treats. Some supermarkets allow you to use your points for cheaper days out, eating out, travel and much more. You’re spending the money anyway so why not get something in return for free?
If you’re shopping online, use voucher sites for discount codes, or consider using a cashback site which gives you money back on each purchase you log through them. And make sure you shop around. Often you can buy the same item on a different website for a cheaper price.
9. Payment holidays and refunds
Read any communications that are being sent out, look out for government announcements and contact your suppliers as there may be help available to you and your family during this time. Many companies are being increasingly flexible with payments and refunds, including:
- Mortgage or rental holidays
- Council tax holidays
- Utility bill holidays
- Travel season tickets refunds
- Loans and credit card holidays
- Interest free overdrafts
The benefits system exists to provide practical help and financial support for those who are unemployed and looking for work. It also provides people with assistance if their earnings are low, if they have a disability, are bringing up children, are retired, care for someone or are ill.
You are also now eligible for Universal credit if you have Covid-19 or are self-isolating at home and are out of work.
Find out more about the benefits available and entitlement.
11. Check your insurance
Your employer may have some schemes and resources you can take advantage of, or you may have arranged your own. These may include:
- Mortgage payment protection insurance
- Private health care cover
- Income protection
For further support with your financial wellbeing, get in touch.