The US/UK may be slowly recovering from their respective recessions but saving money is still on everyone’s minds. Here are 6 tips to help you look after your finances in 2013 to get your own economy back on track.
1: Live Within Your Means
It’s fair to say that everyone has a good idea of how much they are earning, but do you ever sit down and make a detailed list of your outgoings? You would be surprised how many people underestimate the amount of money they spend to maintain their lifestyle.
The first step to looking after your money in the New Year is to monitor your spending over a month with a detailed spread sheet. Rather than letting those receipts mount up in your wallet or purse, put aside 10 minutes every evening to calculate your daily outgoings whilst it is fresh in your mind. The habit may take a while to get used to, but persevere and it will quickly become part of your routine. Once you have calculated your monthly outgoings you will see areas that need cutting back.
2: Cut Back
So you have totalled up your monthly outgoings, and it is now time to see where you can make reductions. It may be that you need to cut back on your grocery spend by making a meal plan at the start of each week. This way, you will know exactly what ingredients need to be bought when you go shopping, and you will be less likely to splurge on expensive treats or waste unused food.
Another area many people find they can cut back on is their gas and electricity bills. Use a comparison website to compare the market and switch to a cheaper provider where possible. Even if your savings just total a few pounds a week this will mount up over the year.
3: Change Your Habits
You can save further on your bills by making some simple changes at home. For example:
- Switch to energy saving light bulbs
- Turn off lights behind you
- Turn down your thermostat
- Install a water meter
- Never leave appliances on standby
- Make sure leaks are fixed quickly to prevent water wastage
Get into the habit of doing these things and you may be surprised at how much you can save.
4: Create an Emergency Fund
After you have analysed your monthly outgoings and taken a look at where you can cut back, calculate a new budget. All the money you have left over each month you could invest in a high interest savings account. Even if you only have £100 a month to save at the start of 2013, by the end of the year you will have a handy £1,200 to use in an emergency. Compare savings accounts online to make sure you get the rest interest rate on the market and maximise your earnings.
5: Protect Your Income
Taking out income protection insurance could be a good way of protecting your finances in the future. This type of insurance is designed to pay you a monthly benefit if you were unable to work because of an illness or an accident. Not many people have considered income protection, but it is actually one of the most important products on the market. If you were too ill to go to work, you would have to rely on savings, a partner’s income or state handouts, which may not be enough to maintain your current lifestyle. Income protection policies can be compared online to help you find a quote within your budget.
6: Save money on Your Life Insurance Bills
Many of us have life insurance, and this is the kind of policy that you could be reluctant to get rid of because of the financial security it brings. But there are actually easy ways you can save money on your life insurance so you do not have to abandon your cover. For example, if you quit smoking for a minimum of 12 months your insurer will consider you a non-smoker, and it is likely that your premiums will go down. In addition, you should always keep a close watch on the market to see if you can find better cover at a lower price. You have no obligation to stay with your current provider, so using a comparison website could be a good way of finding a cheaper policy.
Follow these simple steps and you could end 2013 in a much better financial position. Good luck!
Author bio: Chloe writes on finance for a life insurance comparison website.