Money saving tips from the experts

With the cost of living having increased so much in recent months and some of the most expensive weeks of the year ahead of us, we asked experts from various sectors for their top money saving tips.

Emily London, Founder of Vintage Fashion site, www.emilylondon.co.uk, has these top tips for shopping for style on a budget:

1 – Know your style. You need to know what your personal style is in order to make conscious shopping decisions that result in purchases you enjoy wearing for years to come. If you’re not sure, try taking a photo of your outfit every day for a week. See if you can spot any patterns emerging. What is it about those pieces you particularly like? Is it the colour, shape, texture or print? It’s those nuggets of information, which lead to a greater understanding of how you like to dress and from there, you can use this knowledge to inform your next purchase. It takes practice and a little guidance. I can help!

Emily London, Sustainable Personal Style Reset service, from £220

2 – Look for quality over trend. It’s easy to get sucked into the fast fashion trend cycle; clicking ‘add to basket’ to ensure the latest must-have is in your wardrobe before you can say, ‘do I really need it?’  Take a moment and seek out items that stand the test of time, rather than a particular fashion season. It could be an oversize dinner jacket, a loosely tailored silk blouse or a Swarovski crystal-encrusted handbag. Set up alerts for the items you are looking for on resale websites such as Vestiaire Collective. Currently there are seven pages of ‘dinner jackets’ for sale on VC, with prices starting at £22, and yes, this way of shopping takes time and patience, but your perseverance will be rewarded with something truly special.

3 – Do your research. The world of luxury handbags continues to go from strength to strength, as does the luxury resale market. With brands such as Chanel increasing its prices for its classic styles, there’s never been a better time to buy a luxury handbag second-hand. There are many resale sites to shop from. I prefer to see the handbags in person and at Sign of The Times (a luxury fashion consignment store in the heart of Chelsea) you can do just that. Just look at the bags on its website and choose to collect your purchase from its store. You can review the bag in the store when you pick it up.

Paloma Kubiak, Editor of leading personal finance website www.Yourmoney.com, has these top tips for saving on household expenses:

“The things I do to save money include buying frozen veg as it’s often cheaper and lasts longer. I love spinach as you can grab a bundle and put into pasta, curry etc.

“I’m a big fan of Vinted where I can buy and sell clothes (I’ve made over £500 in a year). People receive unwanted gifts and sell them brand new for a fraction of the original retail price. But also, second-hand/pre-loved goods can be in great condition. I sell a lot of my children’s clothes via the app which then funds the next round of purchases (they grow so quick!).  Just to add, there are no selling fees for Vinted which is another bonus. The buyer also pays for postage and a protection fee is added to the price too.

“And one more from me is a bucket in the shower to catch the cold water while you wait for the hot water to run through the system. I then recycle this by watering my plants.”

Mat Weir, Founder of First Table explains how you can save on dining out through their site: “First Table is a restaurant discovery platform that offers 50% off the food bill (for two to four guests) at incredible restaurants in the UK, as a reward for dining early. It encourages foodies to get more adventurous and try new cuisines, while restaurants create a buzz by filling their earliest tables. It's a win win.

"We have found that the offer encourages people to experiment with dishes outside of their comfort zone, and we often hear fantastic stories about restaurants they would never have discovered without First Table, alongside some money saving too.”

Brian Brown, Consumer Finance Expert at independent financial information and ratings business Defaqto, says that good money saving falls under three main areas:

1. Financial Management – taking time to study and manage all your incoming and outgoing expenditure
2. Lowering outgoings – finding ways to lower your costs (paying less interest, paying with the right methods etc.)
3. Maximising income – finding ways to increase the money you make (other than salaries)

Financial Management:

1. Have a monthly “money night”.  Put time aside – at least once a month - to make sure you are on top of your finances.  Use the time to check any bank statements, make sure all your bills are paid on time (especially those which could hit your credit rating), check your savings rates, read the financial websites (e.g. www.thisismoney.co.uk)
2. At the start of each year keep a record or all your finances – and as the year goes on keep a running total of how much extra money you’ve saved or earned as a result of your money nights.  At the end of the year calculate how much you’ve earned and how long it took you – you might be surprised to learn that it’s much more than the hourly rate your employer pays you!
3. Check and manage your credit rating by using one of the major credit reference sites:
   1. MSE Credit Club - MSE Credit Club
   1. Credit Karma - Credit Karma UK
   1. Clearscore - ClearScore

While these won’t give you any more money, they can be used to keep your debts on track, and to ensure there are no issues with your credit file which might impact your access to credit.

Having a good credit rating is really important, because you often need to borrow money (mortgages, loans, credit cards, interest free finance etc.) and a good rating will mean you pay lower rates of interest.

• Credit – you SHOULD have credit accounts.  My favourites are a mobile phone and a credit card.  You should use the credit card regularly and ALWAYS pay it back straightaway.  This ensures that you start building up your credit score with the credit reference agencies, which will be a massive help when you do need to borrow serious money (like a mortgage or personal loan).
• NEVER, EVER miss a payment on debt if you can help it.  In particular you should never miss a mortgage, credit card or personal loan repayment.  Doing so can seriously damage your creditworthiness.
• Prioritise your money management – usually (but not always) reducing debt is the most important priority
• Build a “rainy day” fund.  Most advisers think this should be as much as 3-6 months of all of your necessary spending, in case you lose your job or get sick.  Getting savings up to this level is pretty difficult for most people, but even some savings is better than none, so start saving whatever you can.
• Understand how tax on savings works – you have a “Personal Savings Allowance” which is based on your rate of Income Tax.  If you pay no income tax or only the 20% basic rate, you can earn up to £1,000 a year of interest tax free.  If you are on the higher rate of tax (40%) you can earn £500 in tax-free interest.  If you are on the Additional Rate (45%) you pay tax on all savings interest.
• Overdrafts and credit cards – just because you CAN go overdrawn or spend on these, doesn’t mean you should.  Not only can it damage your credit rating, but you do actually have to pay this money back in the end!

Lowering Outgoings:

1. Understand how much you owe and the rates of interest you are paying, and look to see if you can reduce that interest. If you have different types of credit you will usually be paying different rates of interest – typically mortgages have been the lowest rates, then personal loans, then credit cards.
2. Credit Cards - can you clear any credit card debt?   If not, check if can you move that balance to a different card? Quite often you will be able to transfer a credit card debt to a 0% card for a few months – you might have to pay a fee (3% or so) but this can be much better than paying interest on the original card.
3. Personal loans – can you reduce the monthly repayment, but not pay any more interest?  It’s possible – particularly if your credit rating has improved – that you might be able to take out a new loan to repay outstanding debt, but at a lower interest rate than before.  BEWARE of any early repayment charges for the original loan.
4. Mortgages – are you on a fixed rate, or on your lenders’ variable rate? If it’s the latter you will almost always be better off taking out a fixed rate deal.  Mortgage rates have increased very rapidly over 2022, so there are fewer good deals available these days.
5. Mortgages – if you are coming to the end of a fixed rate, ask your current lender what deals they will offer you at the end of your current fix.  Check this against rates being offered elsewhere.
6. Mortgages – if you need a new mortgage (or want to remortgage) and you don’t know what to do, speak to a mortgage broker to help you.  (Companies like www.Habito.com can offer free mortgage advice or help)
7. Mortgages – see if you can reduce your mortgage interest by overpaying each month – even small amounts of overpayment can reduce the length of your mortgage and the interest charged on it
8. Mortgages – if you have spare cash, calculate if overpaying your mortgage would lower you interest more than if you put that cash in a savings account.  With current interest rates on savings being better than for years, it might be better leaving that money in a savings account rather than paying your mortgage off more quickly

Maximising Income

1. Know what interest you are getting on all of your different savings accounts (assuming you have any).
2. Split your savings into money you might need immediately (e.g. your rainy day fund) which should be in an instant or near-instant access account. (e.g. Shawbrook, Chase, Marcus etc.)
3. Money you are absolutely sure you don’t need immediately should be saved in longer-term accounts (often called “savings bonds” or “notice accounts”) – better interest rates are usually available if you can lock up your savings for 1, 2 or 3 years or even longer.
4. If you are saving, or have saved, very considerable amounts of cash think about savings in Cash ISAs – no tax is payable on any interest earned in a Cash ISA, but the interest rates are usually much lower than from taxable savings accounts.
5. Current accounts – consider switching your current account.  Some banks will give you cash for moving your account to them (e.g. Nationwide will pay you £200, Firstdirect will pay you £175).  You could even open a second current account, and use that as your switching account, moving it from provider to provider to earn more cashback.  DO NOT spend this “free” cash – put it in your rainy day savings account.
6. If you need to buy anything online, check to see if there is any cashback available from cashback websites (e.g. www.Quidco.com, www.topcashback.co.uk, ) if you click through from their website before buying.  If you do get any cashback DO NOT spend it – put it in your rainy day account.
7. Look for accounts which give you cash benefits. In particular, companies like Chase are currently giving 1% cashback on almost all spending, for the first 12 months after opening your account.
8. Some current accounts give cash rewards (eg Natwest Reward) if you meet their account requirements (such as minimum amount credited each month, minimum no. of direct debits etc.)

Other tips:

1. Shopping reward points – if you have cards like Tesco Clubcard check out the shopping rewards.  DO NOT use your Clubcard points to buy groceries – Tesco will give you three times the value for purchasing other products or services.  This includes things like restaurant vouchers, holiday vouchers, magazine subscriptions and the like.
2. Personally, I like the idea of setting up a separate savings account and putting into it all of your money saved/earned over the year and then taking SOME of it as a little bonus to treat yourself.  BUT NOT all of it!
3. Make sure you are on the electoral roll as this can affect your ability to get credit.
4. If you holiday abroad, look for accounts which allow you to spend without foreign currency fees (eg Chase current account, Monzo current account etc.)  Not only is this fantastically convenient, but it saves you currency fees and the need to carry lots of cash while abroad (for our holidays in Norway and the Baltic earlier this year we didn’t take a single penny/cent/Krone with us – everything went on our Chase card).