MoneyMagpie Editor and financial expert Vicky Parry shares tips to save £10 a week and boost your emergency fund by £520 a year
UK Savings Week is on between September 22 to 28, and the Magpie Changeover Day to help you get started is on September 23, so now is the perfect time to take stock of your finances and discover how small savings make a big difference.
Even the smallest amount, such as £10 a week, adds up over time to a substantial savings safety net. And there are quite a few ways to get this extra cash back in your pocket each month.
Switch energy
Switching energy tariffs could save you hundreds of pounds a year, especially if you haven’t shopped around in some time. Many people pay more than they need to, simply because they’re on a tariff that’s more expensive than a competitor – or even than another at their current supplier.
As life changes around us, we don’t often think to change our tariff. But if you have recently sent children off to university, or started living alone, or changed jobs to work night shifts, these all have an impact on your energy use. When and how you use your energy will impact the best tariff for you.
Shop around for insurance
Just as with energy suppliers, we are often beholden to car, home, and contents insurance annual policies auto-renewing and just taking whatever the new price is from our account. It might feel convenient to stay with the same provider, but it’s not money-savvy.
Compare insurance prices a couple of weeks before your policy renews. If you want to stay with your provider, find a cheaper like-for-like quote elsewhere and ask if they’ll price match.
Remember, too, whenever you’re switching tariffs, insurance, or mobile or broadband provider, go via a cashback website like TopCashback or Quidco. This will put extra money back in your pocket.
Food shop with a friend
Bulk buying can save a lot – but most of us don’t have pantries or cellars with extra fridges, nor can we get through a vast amount of fresh food in a single week before it goes off.
Go shopping with a friend or family member and split bulk buys between you. This way, you’ll save money together by splitting the cost, without creating food waste or needing to find storage for extra items.
When it comes to checking out, rather than going through in one big shop, agree who will pay for which bulk item. Split it fairly – and then make sure you both collect the loyalty points on a supermarket loyalty card. Extra money-savvy behaviour is to spend on a credit card on a Nectar or Tesco Bank scheme, to earn even more points on your purchases.
Get cheaper broadband
Did you know broadband providers offer social tariffs? If you’re on a low income, you could be eligible to apply for one of these cheap tariffs.
The broadband speed might not be super-fast, but you will still have internet in your home at a much-reduced price. Each provider has different offerings, so speak to your current provider first and shop around to see if you can get a cheaper option. You could save more than £20 a month by switching to a social tariff.
What to do with your savings
It’s all very well saving more money, but you also need to know what to do with it to make sure it works hard for you.
Having a small emergency fund in an easy access savings account is vital for those last-minute financial issues like car or boiler repairs. These accounts tend to have lower interest rates, so there’s little point in keeping your life earnings in one. When you’ve built the emergency fund up, it’s time to consider putting your regular savings into an investment account.
Drip-feed investment
Individual Savings Accounts (ISAs) are tax-free savings accounts with a total savings allowance of £20,000 a year. That means you can pay in up to £20,000 a year across all of your ISAs, and not pay tax on any interest or gains made on the cash or stocks inside the ISA.
A Stocks and Shares ISA is perfect if you’re saving £10 a week. Rather than waiting to move a lump sum into your account, consider regular Direct Debits of weekly or monthly amounts to your Stocks and Shares ISA. An investment of £10 a week is enough to start building for your financial future.
There is a good reason for this: it mitigates market fluctuations. As an illustrative example, if you paid in £500 in one go when shares were worth £1 each, you would have 500 shares. But, if you paid that lump sum a few weeks later instead, a share might cost £0.50, so the same £500 investment would buy you twice as many shares.
Drip-feeding into your investment account helps to balance out the ups and downs of market fluctuations. Pay in £50 a month and one month you might be able to buy 50 shares, the next month the same £50 could buy you 30 shares or 70 shares. It all depends on the share value at time of purchase.
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