Money basics

Creating a budget

Spending wisely

Cutting back

Cutting back

The information in this guide was last updated on 26/02/2014

From energy-efficient homes to smart supermarket shopping, find out how to cut your costs and get more from your money.

Watch out for impulse buys

We’re often governed by our emotions when we make buying decisions. Have you ever been to the supermarket while you were feeling hungry, and bought lots of food you wouldn’t normally choose? Or gone shopping as a pick-me-up when you’re having a bad day?

To help stop expensive impulse buys damaging your money management, you need to plan ahead. Try keeping a set amount of money free each month for recreational spending, or withdrawing just a set amount of cash for a trip to the shops. 

Are deals and offers always good value?

It’s tempting to pick up items that are on sale or part of a special offer, because they offer a better deal than normal prices. Think about whether you need it, how much it costs (not how much it’s reduced by) and whether you’d normally buy it before you take your bargain to the till.

Shop around and use loyalty points

Most people know that it makes sense to shop around, but it can seem like a lot of work. The key to finding the best option is having the patience to plan before you buy. So make sure you build in time to compare supermarket shopping prices, and check prices online to make sure you’re getting the best deal on insurance and utilities. If you use a loyalty card, take into account how much you could save by using points to pay.

Plan for big events

There are certain times of the year when our spending peaks, whether it’s summer holidays, birthdays or religious holidays. If you know you’ve got a big event coming up, try to plan ahead. You could adjust your budget for a few months in advance to save up extra cash.

Make extra cash

As well as saving money on what you spend, you can get extra money by earning. If you’re working, you could ask your employer about taking on extra hours, or consider taking on freelance jobs. If you have a spare room, you could use it to generate extra income by renting it out to a tenant or lodger. You will need to check with your mortgage provider to confirm what their policy is about renting to a tenant or lodger.

In both cases you’ll need to check your tax situation before deciding to go ahead – you’ll have to declare any income so that you pay the correct tax.

There are plenty of short-term ways to bring in some extra cash too – having a clear out and going to a car boot sale, for example, or selling things you don’t need online.

Could you remortgage your home?

Remortgaging means moving your mortgage from one provider to another. You do this by paying off your original mortgage loan using money borrowed from the new provider, using your home as security.

If you can find a better deal than you’re currently getting then remortgaging can be a way to save money, but it’s a big decision to make. See our guide to remortgaging.