5 ways to save money and how to do it when spending it

One way to reach financial independence is to save money while spending it. Being frugal when spending allows you to put aside money to pay off debts, build up your emergency fund or build up money you can invest. To me, being frugal is not about being tight with money but to ensure you are getting the most value when spending it. These are some of the ways I have saved money.

Haggle or Compare

Many companies aim to tie you down by yearly contracts with monthly payments. This is particularly the case with energy, broadband and mobile network suppliers. Quite often, new customers obtain a better rate in comparison to existing customers. This leaves existing customers the option to change suppliers or re-negotiate.

I use comparison websites to compare prices between suppliers and then ring up existing suppliers to get a better deal. Sometimes, they can give you a better deal or they transfer you to the retention department. If they value your custom they will try their best to accommodate you. However, if you are not deemed to be of value to them they will not aim to keep you. In these cases, it is in your interest to switch if you can get the same value from another supplier. Quite often after a year you will be eligible for a new customer discount and can go back to your original supplier.

Discount codes

When shopping for a new item I have found that that discounts that can be applied to the basket to reduce the cost of the purchase. My methodology has been a search on sites such as hotukdeals.co.uk, vouchercloud.com or just googling the online shop name with the word discount.

Recently there are Chrome plugins that will automatically do this for you. These include Honey or Pouch.

Cash back or rewards credit card

When purchasing some expensive products it might be worth using cash back credit cards. This allows you to get a certain percentage of your costs back therefore reducing your overall spend. If cash back is not available, some cards offer reward points which can be used for shopping or travel. Regardless of the option you choose, ensure to pay off the card at the end of the month so you do not incur interest.

This is a link to MoneySavingExpert which lists of credit cards with cash back or rewards.

Cash back sites

Cash back sites work by tracking your spending and rewarding you with money for going through their website. They usually make their money from giving you a percentage of money they make from referrals.

Two of U.K. biggest sites are Quidco and TopCashBack. I have mainly used them for financial products but I always carry out a comparison to get the best rate and so have already decided where I will be purchasing from.

Do you need it?

Ultimately, the best way to save money is to not buy things. There are obviously things we need to buy or pay for. These things I call necessities of life e.g. paying for a home, heating or tax.

However, other desirables which are not necessities are where we should be more mindful. We are exposed to adverts on phones, TV and social media that are engineered to influence us to make purchases. The option of One Click shopping and interest free credit have made the act of buying almost effortless, enticing and compulsive.

How can we counteract this? I have started using wish list features. If I see something I like, I add it to the wish list and review a month later to see if I still need the item. When I review my list, I ask the following questions:
- Where will it be stored in the home?
- How much will cost to run?
- How often will I use it?
- Can I borrow it from someone else if I use it infrequently?
- If I buy it what value will I get from it?
- Will I save time using it?
- Will it generate income or will it be worth more in the future?

In conclusion, I have found there to be lots of small pockets of ideas that have allowed me to save money while also spending and enjoying life.