Tackle One Big Spend
Small Habits, Big Savings
Most of the thrifty habits I have tried to get into are frequent – some daily, some weekly, most at least once a month. There are two simple reasons for that: done often any task becomes an effortless habit and if I make small but frequent reductions in my spending these add up to big savings. So, for example, making up a month’s worth of sandwiches and putting them in the freezer once a week adds up to hundreds of pounds off our grocery budget over a year.
There are some areas of spending, though, where I could make savings just by paying them a little attention once or twice a year – things like changing our car insurance provider annually to get the keenest deal, or planning Christmas well in advance so that we don’t end up paying over the odds at the last minute. These are the Big Spends, and paying a little attention to the Big Spends now and again saves money and gives your morale a little boost because you can instantly see that you have saved not pounds but tens, even hundreds of pounds. That’s quite a good return for only a few hours just a few times a year. So I have got into the habit of tackling one Big Spend every so often.
How To Figure Out What Your Big Spends Are
What do I mean by a Big Spend? Well, anything where you pay out over £100 each month, or for which you pay out several hundred once or twice a year. Things like utility bills, car insurance, TV and broadband packages are Big Spends. So are holidays, Christmas and school uniforms. To identify your own Big Spends you need to go through your bank statements and identify the areas where you spend larger sums of money. If you have already begun to take control of your money you will probably have direct debits set up for most of these, but take note of large sums that only come out occasionally. List them all and try to note what your monthly/ quarterly/ annual spend is on each. That’s the figure you want to reduce.
How To Tackle Your Big Spends
Ready to tackle one big spend? Here’s how you do it, with three simple questions.
Ask yourself, “Do we really need or want this?” If you can live without it, then consider ditching it. For example, many years ago Tartan Dad and I realised that we could manage without a car (we cycled most places, lived near good transport links, had a big supermarket almost on our doorstep and – crucially – no Little Tartans yet). Getting rid of the car instantly freed up the money we had spent on petrol, insurance, maintenance, MOTs… Big Spend to Big Saving in one step. You do have to work with the real not the ideal here – only drop a Big Spend from your budget if you can realistically manage without it. We did get a car again in a couple of years – circumstances change and your needs change with them.
Ask yourself, “Can we live with less of this?” OK – so you have decided that this Big Spend is a keeper, now consider whether or not you could reduce the amount, or level of it you currently enjoy. For example, if you have decided your family could not live without TV then could you replace your broadband package with Freeview? The Tartan Family and I disagree about this – the male Tartans big and small are horrified at the idea, but I have noticed that when we go on holiday for two weeks to a house with Freeview nobody actually dies… I haven’t won this round (yet) but we have taken this approach with gift buying, reducing the number of people for whom we buy gifts. I consider gifts to be an important part of celebrating our relationships with others so dropping gift-buying from our budget altogether is not an option. These days, though, it is mainly limited to children. We are happy with this level, and that lets us reduce the amount of this Big Spend.
Ask yourself, “Can we get this for less?” So you have decided to keep this Big Spend and either reduced the amount you want to enjoy, or decided you need it to stay at the same level. It’s time to find out if you can get it for less. Do your research – Google it, hit price comparison websites, shop around, use cashback sites, find voucher codes, search online for budget suppliers, look it up on Money Saving Expert, ask around in real life and on forums. And then do it.
Make A Habit Of It
Many of your Big Spend reductions create new thrifty habits – for example, if you got a cheaper car insurance deal you will need to repeat this each year at the same time to make sure your premiums don’t creep back up. Make a note in your diary of when next you need to do something about this Big Spend to make sure that it becomes one of your personal thrifty habits.