How you could save an extra £250 a month

Sam Slator 06/02/2017 in Multi-Asset

When it comes to saving and investing, the perception can sometimes be that you must have a lot of cash to get started. Yet amid the chaos of our daily lives, we all have something we want to save towards, whether it be buying a property, sending the kids to university, securing our retirement income or just taking a much-needed holiday!

As inflation edges higher and wages are perhaps not rising accordingly, saving money may feel as if it’s more difficult than ever. But it doesn’t have to be. There are lots of small ways to reduce your spending and try to free up some cash to invest.

I did a quick office poll and here are five tips offered by some of my colleagues.

1. Online grocery shopping

Wheeling the trolley through the aisles of a supermarket, particularly when taking the kids shopping, can sometimes conjure up a few mystery items or impulse buys, which you neither want nor need. Switching to online can comfortably save you up to £20 a week as you only buy what you need. If you prefer the in-store experience, then be sure to look for items like herbs and spices in the ‘world food’ section where you are likely to get more bang for your buck.

  • Colleague saving: £20 a week

2. Loyalty isn’t always the best policy

Many assume that the longer you stay tied to a company for services such as television and internet, the better the deal you will be offered. In fact nowadays, new customer deals can save you a lot more money. Comparison sites such as Compare the Market and Money Supermarket do all the hard work for you, so just see what’s available out there and you may find the bargain you thought never existed! This includes hassle-free pay-as-you-go TV services rather than the standard 24-month contract you can get tied into, and keeping track of your insurance renewals to ensure you are not paying more than you should.

  • Colleague saving: £12.50 a month


3. Access the resale market

Facebook, Amazon, Ebay, Gumtree… the list goes on! As well as being able to buy second-hand goods far cheaper than in stores, you can also sell unwanted items of your own rather than taking up valuable space in your house. There are markets for all types of things today, ranging from prams to Peppa Pig collectibles to printers.

  • Colleague saving: £200 a year

4. Bring the party home

Dinner parties are a great and cheap way to enjoy your friends’ company. You can use online shopping for ingredients, invite whoever you want, and have no potentially excruciating cab journey home to look forward to. For the gin-lovers out there, a colleague of mine recommended a monthly Gin Explorer box, which consists of around eight gin shots and mixers for £24.99. What’s more, you receive four different types of gin!

  • Colleague saving: £25 (based on two people)

5. Cars aren’t king

Believe it or not.. there’s more ways to get around than a car! With cars come insurance, regular repairs and fuel. If you live in London, you can get a Boris Bike card for just £90 and avoid those car-related costs. If outside London, you can still ride a bike to work, or even walk. The exercise means you could even ditch the gym if that new year’s resolution is coming unstuck.

  • Colleague saving: More than £115 a month across gym, car insurance and fuel.

You save £250 a month!

Taking advantage of the above five tips could comfortably save you more than £250 per month. If you invested that over five years, assuming 4% annual returns, that could build your pot to over £16,000! That’s a lot for what might be just a little effort in getting the most out of your finances. Even if you invested a smaller amount of £100 per month, assuming the same 4% annual returns, you could net more than £6,500 in five years*.

Don’t worry if some of the above don’t relate specifically to you – as we said, there are lots of ways to reduce your expenditure.

For those of you that are new to investing, read our guide on how to choose a fund.

Multi asset funds are an attractive proposition as the manager picks the underlying investments, but also rebalances the portfolio as the investing environment changes, meaning you don’t need to have sleepless nights worrying about whether you’ve invested in the right asset at the right time.

Some of our Elite Rated multi-asset funds include Investec Cautious Managed, Premier Multi Asset Monthly Income, Jupiter Merlin Balanced and M&G Episode Income.

*The Calculator Site, compound interest calculator, £250/mth, 5 years, 4% annual interest rate, compounded monthly

**The Calculator Site, compound interest calculator, £100/mth, 5 years, 4% annual interest rate, compounded monthly

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.