New research suggests that saving £194 a month equates to financial happiness. Follow these five simple ways to get to this magic amount.
What price financial happiness? According to a new report by Skipton Building Society, a state of financial happiness can be reached by saving £194 a month.
The mutual reckons the average Brit currently saves £167 a month, meaning that he or she only needs to save an extra £27 a month (£6.75 a week).
Whether you're a disciplined saver edging close to that figure, or a bit of a savings slacker in need of inspiration, here are five easy ways to get to that £194 a month target.
1. Make your own cuppa
A small cafe latte at Costa Coffee in London costs £2.10, while a small cup of tea costs £1.65. If you get a couple of cups everyday, then this cost will mount up quickly. Two lattes every working days means a cost of about £500 a year.
There is a cheaper alternative, and you don’t have to lose the quality taste. Getting a pack of tea or coffee from the supermarket is far cheaper. Even if you buy the most expensive brands, the cost of a pack is unlikely to be more than £4, and it'll probably provide 30 or more cups. On this basis, you will be spending only about £60 on your two cups a day, a saving of over £400 during the whole year.
Of course, you could also use the office supply of tea or coffee, which tends to be free!
Saving: £30+ every month
2. Make that restaurant night out once a month
Going for meals out on a regular basis quickly burns a hole in your wallet.
Inflation is the enemy when it comes to your savings because it attacks real returns, and reduces the purchasing power of your cash.
The average cost of a meal in London is over £40. It’s lower elsewhere in the country, but you’re still lucky to get a few glasses of wine and a two-course meal at a nice restaurant for less than £20 a head.
The bigger your family, the larger the savings you can make from this. You don’t have to be a complete Scrooge and never eat out, but making it into more of a rare treat will save you hundreds of pounds over a year.
For a normal couple outside London, the total bill for eating out once a week will be around £160, and it could be much more. If they go once a month instead, then they could make a saving of around £140.
Saving: £140 a month
3. Switch your digital TV & broadband
Much of the UK has already moved over to digital TV, and the rest of the country will see traditional analogue TV ending over the next couple of years. There are plenty of options out there for digital TV, and many ways to save.
One good way to save money in this area is "bundling", where you get a shared package of broadband, telephone and TV with providers like BT and Sky, instead of buying each of them separately. For example, you can get 70 Freeview digital TV and radio channels, as well as broadband internet and phone calls, with BT Vision for as little as £17.99 a month.
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This is much cheaper than the more expensive deals at Sky, although these do provide you with many more channels. Take the Sky+ with Sky World package, which includes broadband and free evening and weekend calls as well as lots of digital TV channels. With this package, you pay £52 a month, plus £49 for the box and £30 for the standard set-up. It's pricey, although you do get a £25 M&S voucher in return. The cheapest Sky deal for TV, broadband and calls is £19.50 a month.
When weighing up these deals, it's worth thinking about whether you really need all these channels. If you mainly watch the terrestial channels and don't often turn over to Sky Sports or Movies, then it might be worth going for the cheaper Freeview deals.
HD, Sky+ and 3D TV are other ways that you can, if you wish, pay much more for TV. Drop these if you want to save more cash.
Saving: £30+ a month
4. Get a water meter
For most people in the UK, it’s free to get a water meter and you can save substantial amounts.
The main advantage of a water meter is that it means you will be charged for the exact amount of water you use, rather than a fixed amount based on your property’s value. This can lead to substantial savings.
My own research found that in my home area (south Cheshire), the water bill for a semi-detached house with three people would be cut by around £150 a year (from £297 to just under £146), simply by installing a water meter.
Saving: £10+ a month
5. Change your gas & electricity supplier
There’s a huge variation in the price that you might have to pay for gas and electricity.
Again, it’s worth thinking about getting a shared package of gas and electricity, rather than buying them separately, if you want to save money.
In my home area, the cheapest deal (for gas and electricity together) for a medium-sized house is £877 a year with first:utility’s iSave Dual Fuel V5 deal. The most expensive, Utilita’s Standard deal, comes in a £1,541 a year, almost £700 more.
Even the cheapest British Gas option (the WebSaver 10 Dual Fuel) costs £981, more than a hundred pounds more expensive than the cheapest offering.
The first thing you should do is to compare the options out there, for example by using our own energy quote engine. It’s relatively easy to change supplier, and you can change supplier as often as you want, although there may be a financial penalty if you finish your deal with a supplier early.
Saving: At least £8 a month.
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