Before we start, a little disclaimer: when it comes to money, I’m almost completely self-taught. The things I’ve learned have come through reading, speaking to others and a good bit of trial and error. I’m no financial guru – so if you read this and then lose money based on my advice, tough bananas.
Now, with that out of the way, these are my four big money saving/management tips. These are tricks and hacks that I’ve collected through more than fifteen years of saving and spending.
Learn to Manage your Business Expenses
If you generate expenses due to your work, managing these can save you money and may even give you a little bit of benefit. All of my expenses are made on an American Express that allows me to collect air miles. Every few months, I have enough for a free flight.
In addition, that card is paid off from a separate account so I know that money in = money out. That way there is no panic when the bill comes in. I’ve already claimed the money I need to pay the bill and it doesn’t get spent on household essentials.
Relying on Cash Investments can Hurt your Income
Firstly, cash is great. You need it and sometimes you need it fast. But is having all your savings in cash the best option? I’d find that pretty boring and as I like a bit of risk in my life, I also invest in managed share funds which have outstripped my cash (even with a recession thrown in there) over a ten year period.
I’m also a big fan of the Peer-to-Peer lending schemes available and have got good rates of return. My favourite right now is Funding Circle who are available in both the UK and US. You can also choose your own level of risk.
Prioritise Savings as Part of your Monthly Budget
In your monthly budget, there will be some essentials – food, electricity, gym membership, kids clothing, flowers for the wife etc. But do you put savings on this list? Maybe you should.
As long as I’ve been in employment, I’ve prioritised savings. This takes discipline but the end result is peace of mind. And that’s something that money can’t buy. Having a bigger savings pot could allow you to diversify your portfolio (see above) and see bigger returns on your hard earned cash.
Haggle. On Everything.
This is probably the tip that could save you the most. If you buy anything – electricals, a car, shoes, furniture, insurance, broadband – haggle for the best price. When I lived in East Africa, haggling was the norm and you’d be surprised how many vendors in the West will do you a deal just for asking. If you buy a new phone, ask to get the case for free. Buying a car? Ask the salesman what discount he is going to give you. If they don’t want to play ball, go somewhere else – it’s a buyers’ market out there.
Try this: once a year, review all your big bills – utilities, phone, broadband, mortgage, car insurance – and shop around to see if you can get a better deal. I did this recently and saved about £1600 ($2000) and counting!
Have you got any top money tips? Post them in the comments box so we can all benefit from your wisdom.