16 Best Ways to Save Money (Quick Tips & Strategies) in 2021

Saving money is tough, with instant access to millions of opportunities to spend our hard-earned cash it can sometimes feel like fighting a losing battle. Whether you’re trying to save for a big purchase such as a house or just want more money in your pocket at the end of each month, I’m here to help.

I’m not going to tell you to stop spending money on things you enjoy, as that’s not going to help anyone. Instead, I’m going to show you how by focusing on a few key categories of spend and understanding some overarching principles you can make your money go a lot further and even spend more on the things you enjoy.

Create Finance Goals

Understanding and clearly defining what you want is an essential step to saving money. If you know why you are saving money it will give you the motivation to act upon many of the tricks and tips I’m about to go through.

Knowing where you want to be 12 months from now, or even 5 years from now will give you a target to aim for and something to help you prioritise. This can be anything from saving up for a new car, having enough money to get married or just wanting to set more money aside for retirement. Every financial goal will be unique to you based on what you want to achieve.

Without a goal trying to save a lot of money can seem like an impossible, mammoth task so you won’t know where to start. If you know you need to save £12,000 over the next 2 years for a wedding, you can then break that down to a monthly target of £500. This now becomes a lot more realistic and something you can act upon now.

Breaking your goal down this way will give you a specific target to aim towards that’s measurable. Also breaking it down in this way you’ll be able to see if it’s achievable and you’ll even be able to say whether you’ve achieved your goal as it’s within a specific time frame. This all contributes to significantly increasing the likelihood of making sure you get what you want.

If you want to know how to create financial goals, give this post read where I detail exactly how to get started.

Create a Personal Budget

Creating a very simple monthly budget is an excellent way to know where your money is going each month. Simply by tracking your spend you can identify easy areas to save money, whether that’s on subscriptions you never use or being conscious about how much you’re spending on each category to make sure it’s giving you enough value.

Setting up and managing a budget used to be a long and painful exercise of collating your receipts and manually counting everything. Fortunately, now there are loads of apps available that do all of the heavy lifting, and with a quick refresh can collate and categorise all your recent transactions automatically.

Many people are surprised when they realise how much they spend in certain areas of their life, even me about spending too much in the pub! Although having a budget lets you understand this and can even allow you to spend more in certain areas that bring you the most enjoyment.

To understand exactly how to create a personal budget, give this post a read.

Plan Ahead & Limit Impulsive Purchases

All products and services go through cycles of having deals available, especially if the product has seasonal trends. This can be any deal, although even 20% off can make a huge difference if you can turn this into a habit.

If you know you need to buy something in the next few months, try and plan ahead instead of just buying it straight away. If you can wait for when there’s a deal it can drastically reduce the amount of money you are spending on goods and services.

This can be anything from a new laptop to jeans, if you know what you want and can be patient you’ll be surprised the deals you can find. You may even be able to get something higher quality for the same amount of money you were going to spend originally so can enjoy more luxury items.

You’ll also have the added benefit of avoiding impulsive purchases. Often when people review their spending habits, they’re shocked how much they spend in certain areas, such as spur of the moment shopping trips or late-night online purchases.

Set Up Systematic Savings

Setting up systematic savings can be a habit that drives a significant level of wealth over the long term. This will ideally align to the goals you have set which we’ve just discussed above. When you don’t have to think about saving, or even have to do anything each month to save, you’re much more likely to do it regularly and for it to become a habit.

Even if your goal is to just set aside an extra £100 a month, that will soon add up and give you the momentum and discipline to push for more and bigger goals. A common method is to set aside a certain percentage of your income, this can be anything such as 5%, 10%, 25% or even higher. A lot of this depends on your level of income and your cost of living.

This also has the added benefit of getting you used to live on a lower amount of money. In some way using the notion that you won’t miss what you’ve never had, but also ensures you’re actively saving for your long term goals and ambitions.

Focus on Paying Off High Interest Debt

The costs of carrying a balance on your credit card or having other high-interest debt such as a store card or personal loan can very quickly add up. This can often be 10% a year for a car loan and sometimes over 30% for a credit card or store card which can drastically increase the price of everything you buy.

Every time you pay extra money towards these loans it will help reduce the balance and ongoing payments, helping to keep more money in your pocket.

If you have multiple loans, focusing on the highest interest debt first will help you pay off the total balance off faster. Hopefully by utilising a lot of the tips and strategies on this page can help you free up some money to dedicate towards clearing these debts.

There’s also a common misconception that keeping a balance on your credit card will help your credit score. If you want to learn how your credit score works and help on how to get an excellent credit score, give this a read.

Having a better credit score can also allow you to secure lower interest debt as you appear as a lower risk to the lender, so if you need the money, make sure you’re getting the lowest rate you can.

Buy Your Car in Cash From Savings or Use a Cheap Personal Loan

Car finance always infuriates me. The interest rates for loans should be aligned to the level of risk for the lender, however this doesn’t seem to match up when looking at car loans. Pretty much all (I haven’t personally seen any that don’t) car finance is secured against the car. This means that if you default on payments, the finance company can take your car and sell it to recover their money.

Having a secured loan drastically reduces the risk for the lender, so that should result in a lower interest rate. However, a personal unsecured loan can often be cheaper, for example, with Santander you can get a loan for £15,000 at only 3% interest.

Sorry for my mini rant, however, the solution for many people is to make use of cheap personal loans or ideally even save up with the systematic savings process mentioned above.

By paying in cash, you may also have the added luxury of being in a better bargaining position.

Example

If you buy a car using a 10% car loan for £15,000 and sign a contract for 5 years your monthly repayment will be £315. This seems reasonable on the surface as it’s an affordable amount for a lot of people, especially if you want the car.

However, over the 5 years you’re actually paying an extra £3,932 just in interest, so when you think you bought the car for £15,000, you have actually bought it for £18,932 which also doesn’t include any additional payments for car insurance, maintenance and repairs.

Instead, if you got a personal loan, such as the Santander one at 3% and bought that same £15,000 car, your monthly payments would be £269 and total over 5 years would be £16,156.

This means you’d save £2,776 over 5 years even by borrowing the same amount of money. That’s enough to go on quite an epic holiday, or an awesome increase to your investment pot.

You could also save an extra £1,156 by paying in cash from your savings and avoid paying the interest altogether. Either way, make sure you’re getting the best deal available to you and you know your options.

Switch Energy Providers to a Cheaper Rate

It is key to remember that you’re still getting the same gas and electric regardless of the company that you are with, so make sure you’re not getting ripped off by your provider and find the best deal.

The only thing that differentiates each provider is their customer service and price, funnily enough it’s often the cheaper ones that provide the best service too, madness! Don’t accept being charged more for a poorer quality service, vote with your money and make the switch, it’s quick and easy!

Read this post on the cheapest UK energy suppliers so you know what to look out for when getting the best deal.

If you’re looking for a set it and forget it system, there are a number of new companies that offer an automatic energy switching service. They actively look for the best deals across the market for all of your major bills and then auto-switch you to the cheapest provider when they find an offer that is cheaper, most of them are free too!

Get Cheaper Car Insurance

Car insurance can be a hidden cost increase for many people. The industry have killed customer loyalty, mainly through their insatiable desire for new customers and giving them the best deal.

Comparison websites are partly to blame for this shift as they give people complete transparency on which provider offers the best price, meaning they have to offer excellent deals to attract new business.

Make sure you take advantage of these price comparison websites, it’s also easier than going directly to a company, especially if you wanted to compare a few of them manually.

As of writing MoneySupermarket is the best price comparison site for Car Insurance, so make sure you’re getting the best deal.

Quick Tip

When it comes round to your renewal, letting your car insurance renew automatically can cost you hundreds of pounds extra a year and sometimes more, especially for younger drivers.

Make sure you’re getting the best deal and review your car insurance each year, it should only take a few minutes and can be an incredible hourly rate if you can get money off.

One of the best tips is to aim to sort your car insurance 2 to 3 weeks before it becomes due. Research has indicated that this is the sweet spot where you’re most likely to get the best rates.

Find Other Cheap Insurance – Home, Life, Pet, Phone

Instead of rattling through each of these individually, there’s a great catch-all solution and that’s using price comparison websites as highlighted above for car insurance.

MoneySupermarket is again one of the leading providers for finding the cheapest rates for a multitude of products and services.

It’s also an excellent tool to instantly find what products there are available as this can often be quite a time-consuming process just digging through all the companies, let alone having to compare them!

These lower-cost insurance services can sometimes go under the radar as they’re usually quite cheap to begin with. However, that’s how the providers make their money and often within a few minutes you can have a significantly cheaper rate for exactly the same service, saving you a significant amount of money in the process, keeping more money in your pocket.

Find a Cheaper and Better Broadband

Internet is becoming more and more important in our daily lives, from streaming series and films in the evening to the ability to work effectively from home.

This means having a good and reliable service is essential, but doesn’t mean you should be overcharged for the privilege.

By understanding what offers are available you can often find that you can get a significant increase in speed for only a tiny amount extra.

Uswitch is a leading comparison site that has a great section that focuses on broadband. To get started, go to Uswitch here.

Quick Tip

Broadband providers usually have a cheaper introductory rate to entice new customers. This is usually the period that you originally sign up for whether it’s 12, 18 or 24 months.

However, if you let the contract renew or keep rolling after this period, you’re often given the full standard charge without any discounts. This can be quite a lot higher than the original rate, although the good news is that if you’re on this at the moment, you can switch to a new provider easily and get the recurring savings.

Get the Best Phone Deal for You

Nowadays buying a phone is a very personal thing as for many people it becomes an extension of themselves.

As a result, people don’t mind paying quite hefty sums of money for the privilege of having the latest technology in their pocket. However, this doesn’t mean you need to pay over the odds so make sure you shop around for the best deal.

One crafty way that phone companies over-charge customers is when people forget to switch away from their contract after it has finished so they’re still paying an inflated charge for a handset that they already own.

Telecoms regulator Ofcom found that in the UK people are paying an extra £182m a year compared to if they switched to a new contract, so make sure this isn’t you!

Quick Tip

Whatever price you are given for a phone on contract, multiply it by the number of months the contract is for so you can see the total contract value.

Once you have this figure, compare it to buying the handset directly plus a comparable sim-only deal. This will help you understand whether it’s a good deal or not and help you undercover hidden deals both in buying the phone outright or getting a contract.

Remortgaging onto a Lower Rate

For many people, other than taxes, their mortgage payment is their biggest expense so any slight improvement can make a huge difference.

Most mortgage products have an introductory fixed rate of 2 to 5 years, then it transitions onto a higher variable rate costing you more money. It is at this point that you have a number of options available to avoid this increase in charge, although it is best to explore these options around 6 months before this date so you have time to get everything in place.

The first thing to do is discuss options with your current lender and they may be able to switch you to a new deal, known as a product transfer. Once you have their offer, you can now explore the market to try and beat this interest rate.

For every £100,000 you borrow through your mortgage, every percent you can save on interest will save you £1,000 per year on your mortgage interest cost so the savings can quite rapidly add up.

Quick Tips

Improving your credit score will help give you access to a wider range of mortgage products as you’ll seem a lot safer to a lender. If you want to know how to get an excellent credit score, give this a read.

Also having a bigger deposit can give you access to better mortgage interest rates. Mortgage products usually work in blocks based on your loan-to-value (LTV) ratio, so how much you’re borrowing in relation to your property value.

These blocks are usually in increments of 5%, so an 85% LTV product will typically offer a better rate than a 95% LTV. If you’re very close to the next banding, it may be worth to adding in money from savings to secure that lower LTV product, so it could pay to do a bit of research.

Also, remember that your home may be repossessed if you do not keep up the mortgage repayments, so please be cautious doing any equity releases or overstretching your finances.

Credit Card Rewards

Credit card rewards can be an excellent way to save money, and is a brilliant return on your time as once it is set up you can keep earning rewards for decades.

How I like to set up my rewards credit cards is to have one American Express, which often yields the best rewards that I try and use as default on all purchases. In the UK the free Platinum Everyday card offers up to 1% cash back on purchases, which is not bad for spending as you otherwise would.

Then I have a backup rewards card that’s a Visa or Mastercard that can be used in the event that I cannot make the purchase through my American Express. These are accepted everywhere that take card payments, although offer a lower rewards rate, the one I have is 0.3% so still quite good for a backup plan.

Quick Tips

Make sure to only treat your credit card as an extension of your bank account and debit card. Never put costs onto your credit card unless you are certain you can pay the balance at the end of the month.

Carrying a balance on your credit card can cost over over 20% interest which is astronomical, so make sure you set up an automated direct debit to clear the balance each month.

Using credit cards also has the added benefit of improving your credit score and getting better consumer protection on purchases, so even more benefits.

Find Cheaper (and More Luxurious) Holidays

For many people, their holiday is something they look forward to for a long time. It’s a time to make memories and enjoy the rewards of all the hard work you’ve put into your job or business, not a time to cut back and count the pennies.

Often even by booking in advance or finding deals that aren’t listed on the main travel websites can help save a load of money. Waiting for deals on sites like Secret Escapes and Holiday Pirates can uncover some hidden gems.

Also going to a less popular or cheaper destination but getting an upgrade at the place where you’re staying can save you a ton whilst also being more luxurious. This is especially true for those people just wanting a relaxing trip and aren’t going to venture much outside of the hotel.

Using this tactic is also a great way to find an adventure as you may end up somewhere new that you’d never even considered!

Find Great Restaurant Deals

I’m a huge fan of eating out at restaurants, although the costs can quickly add up if you’re going out frequently. A lot of people will just simply say to stop eating out and it’ll save you a ton of money, whilst this is true, that’s quite a miserable existence.

Instead, if you focus on finding great restaurant deals, you can still enjoy eating out but without breaking the bank.

For example, using something like TasteCard, Groupon or Meerkat Meals can save you up to 50% off the bill. This can make a massive difference if you can do this each time you eat out, helping your money go further and allowing you to continue to enjoy eating out whilst still saving.

Cash Back with Online Purchases – (TopCashBack)

One quick way of saving money is to use websites that offer cash back for online purchases. Websites like TopCashBack have deals with thousands of top retailers and when you click through to retailers from their site, offer you money back based on your purchase price.

This can be on practically anything, from holidays to takeaways and you’ll be surprised how much it adds up. I’ve saved over £1,000 across the past few years just making a few clicks before a purchase.

It even allowed me to upgrade my holiday effectively for free as I spent the cashback I was going to receive on a better room and lounge access, it felt even better knowing it was free!

If you want to get started click here to go to TopCashBack.

These can also be combined with the credit card rewards mentioned above so you get double rewards!

Keep Reading

Whilst knowing the best ways to save money is an excellent strategy to make sure you have more money left at the end of each month, earning more money will help accelerate this goal. Also understanding how to invest will be an essential skill for you to know what to do with the money once you’ve saved it.

Keep reading below on how to negotiate your salary to get a pay rise from your job and how to invest and grow the savings you’ve worked so hard to earn.