These tips could help you save £10,000 in 2013
Wouldn't it be fantastic if your boss kicked off the New Year by offering you a £10k pay rise? Or you suddenly discovered an old savings account you had forgotten about with a healthy £10k balance?
Those things might be a pipe dream, but did you know that it's possible to boost your family's financial position by £10k next year, with a little careful planning?
But if you are serious about saving, or making money in 2013, it can be done. Our 10 top tips show you how to save over £10k next year (in fact, our savings totalled £11,859):
1. Switch your homeloan
One of the quickest ways to save a significant sum is to move your homeloan, especially if you haven't assessed your mortgage for a couple of years and you have a lot of equity in your home.
For example, the average standard variable rate is currently 4.86%, according to Moneyfacts, which amounts to a monthly repayment of £865 on a typical £150,000 mortgage.
Switch to a market leading five-year fixed mortgage at 2.79%, and you will save a whopping £170 a month, or £2,040 a year. There's an upfront cost to switching – approximately £1,000 – but the savings are still massive.
Saving: £1,040 in the first year (because of the switching fee), and then over £2,040 a year for the next four years!
2. Quit smoking
It's harder than many people understand, as any smoker or ex-smoker will testify, but packing in smoking is one of the best things you can do in life, full stop.
Apart from the obvious health benefits, it is a stupidly expensive habit. A packet of cigarettes a day is a whopping £7, totalling an eye-watering £2,555 a year.
Even if you use patches or nicotine gum to help you quit, they come at a minimal cost, or are often available through the NHS.
3. Beat the tax man
Savings rates are paltry in the current low interest rate climate, but that means it's more important than ever to shop around for a good deal to stop your money being eaten away by inflation.
One easy way to make more of your cash is to save it in a tax-free wrapper, called an ISA. These Individual Savings Accounts work in the same way as other savings products – you just don't need to pay tax on any income you receive, keeping it outside of the clutches of the taxman for as long as you choose.
This is great for basic rate taxpayers and very attractive to higher rate taxpayers, as the savings are amplified – for example a 2.5% ISA rate is the equivalent of a 4.1% normal savings rate for a 40% taxpayer.
Saving: a potential £100 in saved tax (depending on your balance and the ISA rate)
4. Cut the coffee
Wake up and smell the coffee! Or better still, don't.
A typical cup of coffee bought from a cafe is going to cost you at least £2 a day - possibly more.
You may think it's necessary to set you up for the day, but chances are you are probably just addicted to the caffeine. It doesn't take long – just a few days - for caffeine withdrawal symptoms to abate and for you to be able to manage without it. Why not give it a try over the Christmas break?
There's a massive financial benefit to quitting too. That morning mocha should be treated as a luxury, not a daily necessity. The £2 a day spent on coffee will add up to an eye-watering £730 a year.
5. Do you really need Sky?
For many families up and down the UK, a full Sky package is a family essential, especially during the football season.
If you have plenty of money and can afford all of life's little luxuries, then spend your money on what you want. If you are feeling the financial pinch and could really do with making savings in 2013, ditch your Sky package and watch terrestrial channels instead.
It's your money and your call, but nobody can honestly believe that having an expensive TV package is an essential expense.
When you take into account that a full Sky package including movies and films can top £50 a month the savings are clear.
6. Get a 0% credit card
Credit cards can be an expensive way to borrow if you don't get wise to the way the card companies make their money – by relying on borrower apathy.
In other words they want you to stay with them after any introductory deals have ended, because that's when the interest rate goes into double figures.
You can get around this by switching your credit card debt to a balance transfer credit card that offers 0% interest-free credit for a set period, such as 12 months. This will give you some breathing space to pay off, or make a serious dent, in your balance without it rising further.
For example, if you currently have a £5,000 credit card balance and you are paying a typical APR of 18.9% you could make a saving of £803 in the first 12 months by switching to a 0% balance transfer card. Money that can be better spent paying down the actual balance.
7. Give up on the gym
Many people join a swanky gym in January in an effort to kick-start their fitness routine, believing that the fluffy towels and free shampoo will somehow turn them from a couch potato into one of those people who genuinely enjoy working out.
The effect is almost always temporary, with most of us simply wasting our money paying for something we hardly use, and when we do it's only because we feel guilty.
Ditch the cost, and the guilt, and go for a run. It's free, takes up less of your time and you can have a shower in your own house afterwards.
Saving: £600 a year
8. Rent a room
Want to save even more on your mortgage costs? If you have a spare room you can rent it out to a lodger and make some serious cash.
This could save you thousands of pounds as your lodger is effectively helping you to pay off your homeloan.
Even better the Government allows you to earn money from a lodger tax-free, up to an annual limit of £4,250, that's £354 a month.
And remember, many lodgers take a room because they work away from home, so it's common for them to only stay a few nights a week – typically arriving on Monday evening and leaving on Thursday morning. That means you still have your house to yourself for half the week.
Saving (in this case, earnings): £4,250
9. Be fastidious about food
Prepare to get pernickety about your food shopping if you want to make some big savings. You need to plan ahead by working out your meals first – including lunch and dinner – and then building your list around them.
This way you not only cut the time spent in the supermarket (and who wants to stay there longer than necessary) you will also cut your shopping budget. Don't be tempted to browse – just get the items on your list and go home.
Even better, order it online. The savings you will make will probably outweigh any delivery cost, and you haven't used any petrol. Using Mysupermarket.co.uk is one way to make sure that you get your weekly shop from the cheapest place on that specific day.
You enter the items you want to buy and the website works out which of its partner supermarkets can fulfill your order for the least money. It reckons its customers save on average £17 a shop by using its service.
Saving: £884 (£17 a week)
Insurance is a necessary part of life, and it pays to be adequately covered. Many people, particularly home and car owners, have a range of policies, including life, buildings, contents, car, and travel insurance.
There are chunky savings to be made by assessing and switching these products regularly to a cheaper deal. Move your utility provider at the same time and you maximise the savings, especially in light of recent energy price hikes.
Of course, it can be time consuming to move your insurance products about, but prepare yourself by getting all your paperwork to hand first and setting aside an afternoon to get the work done.
Alternatively, ask an insurance broker to do the hard work for you. And remember that the cheapest isn't always best when it comes to insurance – ensure you are fully protected!
Saving: Up to £300 (depending on the number of products you hold)