Fifteen Tips To Save You Money

If you enjoy easy gains without pain, then try these tips for size. Each could save you upwards of £20 to £2,000 a year.

Now that the World Cup is over, my goal is to make my expenses dive faster than Christiano Ronaldo!

In order to do this, I've decided to undertake another bout of extreme budgeting, which is when I try to spend as little as I can on top of my usual monthly bills. In January of this year, my discretionary spending came to less than £15, which is a new personal best. Thus, until 9 August, I plan to steer clear of alcohol, cigarettes, drinks and snacks, fast food and takeaways, with my only treat being a weekend newspaper or two. Next month, I'll let you know how my experiment worked out.

Still, I appreciate that extreme budgeting isn't everyone's cup of tea, because it is a tough test of willpower (which is why I waited until the World Cup was over before banning myself from the pub for a month). Therefore, I've gathered together fifteen money-saving ideas to help you to hang onto your cash without going cold turkey!

HOUSEHOLD BILLS

1) Crush your call costs

No matter which call plan you have with BT, you're likely to be paying well over the odds. For example, with the Saver Option 2 tariff from Primus, you can enjoy completely free UK calls at evenings and weekends (only to 01 and 02 numbers). Also, with the popular www.1899.com service, all UK geographical calls of any duration cost just 3p each. For more on trimming your telephone bill, read this article.

2) Hammer your heating and power bills

Domestic gas and electricity bills have soared over the last two years -- in some cases, householders have seen their bills increase by two-thirds over this period. However, over eighteen million gas and electricity customers have never switched supplier, despite an average annual saving of around £200. It's not hard to do, needs no rewiring or re-plumbing, and the rewards are handsome, so why wait? Get cheaper fuel today!

3) Try a water meter

The recent heatwave and drought warnings have brought home the importance of saving water. If you live in a decent-sized home with few occupants, you may benefit by paying for a metered water supply. You can install a meter free of charge and try it for a year to see if it saves you money; learn more here.

4) Minimise your mortgage payment protection insurance (MPPI) premiums

Almost a quarter of mortgage borrowers have MPPI, which covers your mortgage repayments if you are unable to work due to an accident, sickness or unemployment. However, if you've bought MPPI from your mortgage lender, then you've been mugged, because lenders charge as much as they possibly can for this cover, as I warned here. By shopping around for a stand-alone policy, you could save £200 a year. Best Buy providers of MPPI include British Insurance, Helpupay, Paymentcare, payprotect and the Post Office.

5) Bash your broadband bill

Using the excellent search engine on the ADSLGuide website, I found an 8Mbps metered broadband service from Prodigy Networks for under £15 a month. That's as much as 160 times as fast as a standard 56k dial-up service, yet cheaper than AOL's unlimited dial-up package! If you want to combine your broadband service with your home phone, then the Talk3 International package from Carphone Warehouse is the clear winner, as I explained here.

6) Murder your mortgage repayments

By shopping around, you could reduce the annual interest rate on your mortgage from, say, 6.5% to 4.5%, which is a saving of £2,000 a year on a £100,000 interest-only mortgage. However, with 8,500 mortgages to choose from, you need expert help, so try this award-winning, no-fee mortgage broker, which will search the entire market on your behalf.

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BORROWING COSTS

7) Pick a cheaper personal loan

Picking the wrong personal loan is a big mistake: choose unwisely and you could add £100-£200 to the cost of every £1,000 that you borrow. If you want to pick the perfect personal loan, read these twelve tips.

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8) Avoid interest on your plastic debts

A typical British cardholder owes around £2,000 on their credit cards, and with the average interest rate exceeding 15% a year, this means an annual interest bill of roughly £300. By transferring these debts to a 0% credit card, you can take an interest-free breather lasting up to a year. Learn more in this article.

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9) Enjoy a year's interest-free shopping

By using a Best Buy 0% on purchases card, you can shop for up to a year without paying a penny in interest on your spending. The most popular cards in this category are the GE Money Transformation card (0% for twelve months), the Sainsbury's Bank card (ten months) and the Halifax One card (nine months). Be sure to use these cards only for shopping, as other rates and charges apply to balance transfers and cash withdrawals (NEVER withdraw cash on a credit card!).

10) Earn cashback as you spend

If you always pay off your credit-card balance in full, you can earn cashback of between 50p and £2 for every £100 that you spend. For example, over the past year, I've put all of my major and minor purchases on my cashback card, so I'm expecting a cheque for £110 later this month. Best Buys in this category include the GE Money Everyday MasterCard, Amex Platinum and Blue credit cards and Egg Money card.

11) Get an ultra-low rate for life

If you can't be bothered to transfer your card balances between a succession of 0% credit cards, then why not plump for a low-rate lifetime balance transfer? For example, you can enjoy a lifetime rate of 4.95% a year from Intelligent Finance, 5.9% from the GE Money Everyday MasterCard, or 5.94% from the Sainsbury's Bank card. Again, don't spend on these cards if you use them for balance transfers.

OTHER BILLS, ETC.

12) Massage your motoring costs

There are dozens of ways to reduce the cost of owning and running a car or motorcycle. Rather than go into them all here, I'll direct you to How To Beat Fuel At £1 Per Litre.

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12) Prune your insurance premiums

According to the latest British Insurance Premium Index from The AA, these are the typical annual premiums for motor, buildings and home contents insurance:

As you can see, shopping around for home insurance could save you around £133 a year; for car insurance, the saving ranges from £294 to £411 a year. So, don't renew your policies without shopping around first!

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13) Don't overpay for life insurance

If you work and have a partner or children who depend on you financially, then you need life insurance. However, choose the wrong policy and you could pay three times as much as you need to. Be smart: read Oops, You Bought The Wrong Protection, More Buying Blunders To Beware Of and Cut The Cost Of Life Insurance By 35%.

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14) Stop playing the Lottery

While millions dream about winning the jackpot on the Lotto draw, I have a straightforward plan to make me a millionaire. It won't be to everyone's liking, since it involves working flat out to earn as much as I can, spending modestly, and then whacking the majority of my disposable income into carefully chosen shares. Still, at least my "get rich slowly" plan is sure to succeed, whereas the Lotto is nothing but a pipe dream for 99.99% of its players!

15) Get a personal tax-free shelter

If you want to save up to £3,000 per tax year in cash, stick it in a cash mini-ISA, which pays tax-free interest. If you prefer to invest in shares, you can put up to £4,000 into a shares mini-ISA (or £7,000 into a shares maxi-ISA if you don't open a cash ISA). These annual allowances are very valuable: Individual Savings Accounts (ISAs) are your own personal tax shelter, so use them whenever you can.

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That's it from me -- I'm off to have a nice cup of tea, which is my only vice during my (financial) detox month!

More: Use the Fool to compare credit cards, compare mortgages, compare personal loans and compare savings accounts!