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If you’re looking for the best ways to save money in 2023, look no further. The economy in the UK is currently in a dire condition and if you’re struggling to make ends meet, there are simple solutions you can change today to get ahead of the bleak financial outlook.

2023 is set to be a tough year for many households across the country, this guide explains the best ways to save money in 2023.

Keep Track of Monthly Expenditure

Primarily, you need to understand your income and expenditure.

Tracking income is normally easy unless you have multiple income streams. Even if you have monthly income streams you should be able to create a list of incomings and ascertain how much each income stream is.

Expenditure can be more difficult to track and there are various apps now available to help you track the money you’re spending.

By tracking your expenditure, you can isolate areas of spending that are unnecessary or can be cut back on.

For example, you may notice you’re spending a lot of money each week on your grocery shopping, and simple changes to your shopping habits such as selecting cheaper brands or using in-store deals can save you around 25% on your shopping bill.

Switch Supermarket

Many of us are creatures of habit. We visit the same supermarket week in, week out and we buy broadly similar products each week.

Supermarkets rely on your unchanging behaviour. Every so often Which magazine compares the price of an ‘average’ supermarket basket and highlights the cheapest place to shop.

Switching supermarkets doesn’t mean a decrease in quality. You might be surprised to learn that Waitrose sources most of their products from the same places as Sainsburys, Asda and Tesco.

Quality and Price

The difference isn’t quality, it is the price point they put on the label at the end of the chain. A tin of beans doesn’t taste better because it has a Waitrose label on when it’s sourced from the same wholesaler as a Morrisons tin of beans. There will be a marked difference in price.

Switching supermarkets as the market changes will allow you to keep your grocery shopping to a minimum and being frank, you won’t notice too much difference in quality between any of the major supermarket chains.

Shop Around for Insurance Policies

We all need various forms of insurance, they’re unavoidable.

When your renewal comes through for insurance you should do the following:

• Run your details through a comparison site and see the overall market rates for your insurance policy.
• Call your existing insurance provider and explain you have found the policy cheaper.

Once you have done this you will either get offered a discounted renewal price from your insurer or you can opt to cancel your insurance and take a new policy elsewhere.

Most insurers have retention teams with generous discounts available to retain customers.

This process takes about 30 minutes of your time and can save you hundreds of pounds each year.

Don’t Trust Everything Martin Lewis Says

Martin Lewis presents a squeaky-clean financial guru persona, but the truth is, he is hustling as much as anyone offering financial advice.

Martin Lewis is promoting his brand by being everywhere and the ‘everyman’ money guru has a net worth of £123 million.

A net worth he has gained by directing people to his various websites and schemes and selling financial products with commissions.

Some of his politicised opinions have been woefully misguided (wrong) and there will be many people who have fallen foul of some of his advice – especially around taxation and benefits claims.

Take Martin Lewis Advice with Pinch of Salt

If you think Martin Lewis is giving advice that could help you, research it fully independently of his websites and decide whether it will help.

I have seen Martin Lewis telling people to take credit cards on lower or zero percent interest rates for example, which is great advice if you are debt savvy, but terrible advice if you are already struggling with debt and may need to address your debt problem rather than consolidate debt in the short term only to be hit with interest rates you can’t refinance off in the future.

Increase Income – Best Ways to Save Money

There are several ways you can increase your income.

Most people don’t ask for pay rises which can help keep the peace with your employer but will be detrimental to your financial situation.

A good rule of thumb is your employer should be increasing your salary every year and if you haven’t had a pay rise you should ask for one.

Remember, your labour has a value and generates your employer money – you’re only seeking to be renumerated to the value you bring.

Sometimes an employer may decline to give you a pay rise – either because they can’t afford to pay you more or because they don’t want to pay you more.

• If they can’t afford to pay you more, this should ring alarm bells. How solvent is your employer if their margins are so stretched, they can’t afford a pay rise? Use this as a cue to look for employment elsewhere.
• If they refuse to pay you more because they don’t value your work, look elsewhere for employment.

What to Expect After Asking for a Pay Rise

This will leave you with one of three outcomes.

• You will be given a pay rise,
• You will find employment elsewhere that pays more,
• You will not find employment elsewhere and know your work is being compensated fairly at the market rate.

Beside your main avenue of income, look at other potential income streams. Most people have hobbies that can generate income.

Don’t fall for get rich quick schemes and instead focus on your strengths and look at how you can generate additional money using your skillset.

When investing money, don’t invest in areas that promise unrealistic returns. Research your investment and put money into it with a view of slow and steady progress.

The investment markets in 2023 are currently in a bad position, but economies can change rapidly, and a smart investment today could generate healthy returns in a few years’ time.

Clear Debt Before Saving or Investing

If you have debt, it will almost always have a higher interest rate attached to it than the amount you get from saving or investing.

First compare your debt interest rate and the available savings account interest rate. If the best savings interest rate is lower than your debt rate, pay off or pay down your debt first.

The same can be said of investments, except you should also factor in that investments are projected returns, and you may lose all your money.

It might not be best to pay down debt instead of investing or saving is if there are Early Repayment Charges on your debt. These charges are designed to make it unappealing to repay your debt sooner.

To summarise, look at your debt if you have money to spare. If it is on a higher rate than your savings or investments, you should try to repay the debt. This is because the cost of the debt will exceed any gains you make by saving or investing.

Look at Savings Account Rates – Best Ways to Save Money

When the Bank of England puts the base rate up, the cost of borrowing goes up. Mortgages, loans, and credit cards all experience raised interest rates because banks and building societies borrow from the Bank of England at a higher rate.

To mitigate some of this borrowing cost, banks and building societies encourage savers to deposit money with them so they can use the funds to lend out to other customers. While this might sound dodgy (it is a little bit), it has been a customary practice for hundreds of years in the banking sector.

This means if you have money to save, there should be some attractive savings account interest rates available.

Savings Accounts Rates – Best Ways to Save Money

Over the last few years, savings rates have been exceptionally low with some savings accounts offering as little as 0.01%. Now you can find a few accounts offering 2.86%.

With the Bank of England likely to increase the base rate further, the interest rates offered to savers could increase as well.

When depositing any money into a savings account check the bank or building society is covered by the Financial Services Compensation Scheme (FSCS) which protects up to £85,000 if your bank or building society goes bust.

Using Different Banks for Savings

As with energy companies and supermarkets, don’t be put off by switching around when depositing into savings accounts. You will be able to move your money between companies if you haven’t fixed your savings for a set period.

Lastly, banks and building societies tend to push you to open other accounts with them or move your main banking to them. A common tactic is to use the 7-day direct debit switch scheme to make the process seem simple.

While it may be simple, you may not be best placed moving all your banking to another bank or building society so stay firm if all you want to do is open a savings account.

Cut Back on Monthly Subscriptions

Most people have multiple monthly subscriptions to services like Netflix, Amazon Prime and Disney+. When you add up the cost of your subscriptions over the year it will easily be a few hundred pounds if you have more than one subscription.

It is always best to look at which subscriptions you are using and whether the cost of paying for additional subscriptions is worth the usage you get from it.

You will find you have a ‘go to’ subscription and the other services you pay for are used less frequently.

Simply cancelling a subscription can save you £100+ a year with most services.

Check Your Energy Direct Debits

Energy companies in the UK have recently come under intense scrutiny for the way they have raised direct debits despite customers being in credit.

We expect to only pay money for energy we are using but energy companies have been stockpiling money by increasing direct debits. Some energy companies are even using this extra pot of money for solvency or reinvestment.

If your direct debit has been increased by your energy company, you should check the amount being charged is in line with your usage. If it isn’t, you can do a few things to remedy the situation:

• Cancel your direct debit and ask to pay your bill after it is issued,
• Ask the energy company to readjust your direct debit in line with usage,
• Make a complaint and then escalate to Ofgem,
• If the above fails, switch energy companies.

The last point is straightforward as your usage will be below the amount you are being overcharged so switching should always be a cheaper solution.

If you go down the complaints route, you might not have a great experience. Ofgem (the regulator) is spineless and toothless, making it difficult to get a positive resolution unless something particularly egregious has occurred.

Compare Local Fuel Prices – Best Ways to Save Money

Being the creatures of habit we are, most people will simply drive to the nearest petrol station and fill up.

The average cost of doing this is £s every time you fill up. When you consider the price is per litre, and you will probably have a fuel tank of at least 40 litres, the difference of a few pence per litre will add up.

For example, a quick check online shows my cheapest price per litre of petrol as 143.9p a litre. Whereas my local ‘go to’ Tesco petrol station is charging 149.9 a litre.

On my 63-litre fuel tank that is a saving of £3.78. When you then factor in how many times you fill up over a year – let’s say fortnightly, that is a saving of £98.28p each year (more than a free tank of fuel).

Comparison Sites Are Your Friend

Money Supermarket has recently started an ad campaign with Judy Dench playing a pseudo-M and an agent finding cheap products. The tagline is ‘if we can’t save money for people at this time, no one can.’ Or something along those lines.

And this is true, you should be comparing absolutely anything you can to source the best price.

With insurance on comparison websites be careful as the cheapest product may well be worthless. You should combine a cheap price with a high DEFAQTO rating. DEFAQTO evaluates an insurance policy for total coverage, customer experience and ease of claim.

DEFAQTO – Best Ways to Save Money

You should aim for DEFAQTO scores of 4-stars or 5-stars. Anything lower and you risk getting poor value for money, even if the policy is cheap.

Aside from this caveat about insurance, you are best placed to take a little extra time on a comparison site to save money.

Check Back for Best Ways to Save Money

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