Today’s post is from Simon over at Pennies for the Piggy Bank, a blog about simple tips to help you save and make money.
Being frugal is often misunderstood and seen as “tight” or “cheap”. However, what being frugal really means to me, is making the most of the money you do have by making sensible financial decisions. This gradually improves your financial position over time. Here are 7 frugal money rules I try and live by to make my money go further.
Always Shop Around for the Best Deals
This has become so ingrained into me it’s frightening. So much so I feel devasted when I have to pay over the odds for something. One of the easiest ways to save hundreds each year is to make sure you always use comparison sites for the boring but essential stuff like gas, electric and car insurance. Getting into the habit of always comparing and switching at renewal time adds up quite a bit over the years.
Always Collect Cashback and Loyalty Points
This is a no-brainer really – it’s essentially free money. So, whenever I shop online, I check to see if I can get cashback at the same time. This is great when you combine it with shopping around for the best deal at renewal time too…
I also use mobile apps to get cashback at the supermarket whenever I can too. This combined with collecting loyalty points on every shop add up over the long term.
Always Buy Used (If You can)
Buying used has saved me a lot of cash over the years. The classic example is used cars. I’ve never owned a new car (and probably never will). Depreciation is such a huge cost to bear I don’t think I could ever bring myself to buy something that I know will lose about 20% the minute I drive it away.
Some of my other favourite used buys are:
- Kids Clothes – They’re only in them for what seems like 5 minutes, so buying used bundles from eBay saves tons of cash. I bought all our youngest’s clothes on eBay for his first year or so.
- DVD’s – Yes, I still buy DVDs believe it or not. Used DVD’s are dirt cheap on sites like Music Magpie. For years I collected DVD’s that I bought for a fiver when they were on offer in the supermarket. Until one day I realised – I was only watching these films once. It was now used and useless.
- Books – Books are another classic used buy. You don’t really suffer any hardship reading a used book. After all, it’s the content and story that matters. I’ve saved hundreds buying used books on both Amazon and eBay. Textbooks are especially good buys as their so damn expensive new. Plus, you’ll probably be able to flog them again once you’ve read them.
Don’t Buy Brands (For the sake of it)
This was a necessity for me when I was at Uni – I simply couldn’t afford to splash out on brand names as I didn’t have the cash. This taught me to concentrate on what really matters. Does the product work, is it good quality, and do I like it?
I’ve always downshifted on my supermarket shop too. There are a couple of brands I still buy but not many. Generally, most supermarket own brand food is made by one of the main brands anyway.
Don’t Impulse Buy – Especially on the Big Stuff
Avoiding impulse buying is one of the best ways to reduce unnecessary spending. Because if this I’m quite geeky when it comes to large purchases – call me tight but, it just pains me to part with large amounts of cash! So, I tend to do quite a bit of research before a large purchase such as a new kitchen or car (used of course). I like to see if what I’m planning to buy is the best financial option or if there are alternatives, that will give me a similar end-result, for a much lower cost.
For example, in our last house we considered buying a new kitchen but after shopping round realised it was going to set us back thousands. As we were planning on selling in a year or so we decided to give it a “face-lift” for a fraction of the cost. £1.5k vs the £7k quote we’d had. We painted the doors, changed all the door handles and the sink taps, re-tiled ourselves and had a new worktop fitted. It looked like we’d had a new kitchen when we’d finished but we’d saved over £5,000. It was a fair bit of work but definitely worth it, as I doubt, we’d have recouped the £7,000 when we sold the house last year. This post gives you some great ideas about upgrading your kitchen on a budget.
Pay as Little Interest as Possible
I’ve been doing this for as long as I can remember. At university I was pretty bad for racking up debt. As most students do! But I hardly paid any interest on my credit card debt because I constantly switched to a new deal as my existing deal ended. I certainly don’t recommend racking up a load of credit card debt and just, moving it about. But sometimes, life means you need to borrow – so if you do you might as well borrow as cheaply as possible.
Get the Best Return on Your Savings
Since I’ve had enough cash, I’ve always tried to save at the best rates I can find. Unfortunately, the period of ultra-low interest rates has meant that savings rates are at an all-time low. This is one of the reasons I started investing – 0.1% on my savings account wasn’t really floating my boat.
If you can deal with a bit of volatility, then investing in the stock market will give you far greater returns over the long term. The power of compounding works its magic the longer you invest, even, if is a “bit bumpy”. This post gives some great advice for getting started with investing using investment funds.
Summing Up
So, there you go. The 7 money rules I try and live by. They’re certainly not for everyone but have helped me keep my finances in check over the years. Do you have any money rules that you live by? I’d love to hear about them in the comments below.
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