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I’ve said it before here, multiple times I’m sure, but I am a firm believer that £1 saved is worth as much, if not more, than £1 earned. Making small, sustainable changes to your household spending can really transform your family finances. Today I have been asked, by Fidelity, to talk to you about the little luxuries that I cut back on to save for big financial goals and ways that you can do the same.
Important Information: The information in this article is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser. Please also be aware that the value of investments can go down as well as up, and you may get back less than you invest Tax treatment depends on individual circumstances and all tax rules may change in the future.
What is the number one area I’ve cut back to save more?
This may be a little shocking to say, especially as I love batch cooking, meal planning and saving money in general, but I spend too much money on takeaways. I meal plan. I lovingly choose my ingredients at the supermarket. Then, at times, I fail to prepare properly, fail to prepare dinners in time or just get caught up working and then give in to the lure of a nice takeaway. It is SUCH a luxury if you think about it. Someone cooking you whatever meal your heart desires and then having it delivered to your door. All you need to do is open the door, say thanks, feel awkward that you’re not a cash-carrying household so can’t tip, and then sit and devour your naughty takeaway goodness. There is minimal effort involved. For 2020 I decided that I will be cutting back on the takeaways. Eek!
On average, over 2019, we spent around £150 a month on takeaways. This was budgeted for, and we CAN afford it, however, I decided if we could bring this down to £66 a month, around £800 for the year, we would have an extra £1,000 in our budget for 2020. This will allow us to still have a treat dinner once a week, or so, but also cut back too! We will be using half of this money saved on budgeting for our new dog (arriving any day now!) and the other half we will be using to boost our savings and investments.
Can you really cut back on a few luxuries to save for the bigger moments?
Absolutely! I have been doing so since 2015 when I became pregnant with my daughter Daisy. Daisy turns 4 in a couple of weeks and already we have saved a small 4 figure sum, for her future, just by cutting back on a couple of unnecessary monthly entertainment packages. Having a poorly new baby meant that we spent a lot of time on Amazon browsing for items to make our life easier, and so it became fairly expensive pretty quickly! Then we started finding less time to cook, and before we knew it there were several areas that we could make some decent cutbacks in to save money.
Some of the money that we are saving will be building up for Daisy’s future. Perhaps for her wedding day. Or university. Maybe a little lump sum towards her first-ever home of her own. It’s really exciting to know that we are preparing for her future financially, as my own parents weren’t savers!
My top tips for cutting back on luxury food purchases:
I work from home and spend a lot of my life here. I’m writing this post from my lovely little office in the back of my new house. Often I find myself thinking I deserve some nice luxuries when it comes to shopping in particular. Fancy wine, extra special pizzas, a takeaway after a 10 hour day in London, the list goes on really. Now I do deserve a treat sometimes but this is what I like to do when I need to dial the spends down a little:
- Meal plan. I have been meal planning for several years now and it has saved us a LOT of money. We no longer waste food because it is going uneaten. We eat a wider variety of meals and because I have lots of slow cooker recipes I can plan for even the busiest of weeks with ease.
- Batch cook. This goes hand in hand with batch cooking. Recently I was preparing a slow cooker cottage pie for dinner and decided to add lots more vegetables and make a nice mix up for tortillas for lunches for the following few days. This allowed me to cut down on our spends, use less money on gas to cook food and also have leftovers on hand to make up tasty, wholesome lunches in just minutes.
- Down brand in the supermarket. We love brands in our home but sometimes trying something different has great results. Instead of buying branded staples we typically buy the supermarket basic staples and add our own seasonings, herbs and spices. This can make a big saving across a week’s food shop.
- Change your supermarket. I love to visit lots of different supermarkets. I wouldn’t say I was loyal to any particular supermarket. Sometimes I’ll get a Sainsburys delivery, other times I’ll pick up a Tesco click & collect grocery order. Recently I’ve started shopping at Lidl more because it’s just down the road from my house. Change it up! Try a discounter supermarket. Visit Home Bargains. Check out the cooking ingredients in Poundland next time you’re passing. You’ll be surprised what you’re overpaying for.
- Share dishes if you’re having a takeaway. If you’re having a takeaway then cut back a little. We used to buy too much food, and be happy to have leftovers the next day. Instead, we will share a curry, rice & naan bread now. Or something similar. Also, some of our local takeaways have lovely set menus or cheaper multi-buys on selected days, like 5 dishes for £15 on Tuesday at our local Chinese.
Make small and realistic changes. I have found that the most sustainable long-term savings have been the ones that save us a few pounds each week. Things like switching brands on staples, cutting down a little on the takeaways or spending £5 less when ordering. These savings really do add up fast and allow us to still enjoy a nice quality of life too.
If you’re looking for more tips then check out my best 50 moneysaving tips.
Fidelity’s ISA Cappuccino Plan
A study conducted by Fidelity showed that ditching a daily shop-bought coffee# could save you £50 monthly to invest in a Stocks and Shares ISA. While £50 may not sound like a vast sum this could become more than £7,000 after 10 years and nearly £18,000 in 20 years time##!
Invest for the moments that matter
Fidelity has over 50 years of experience in the investment industry and believes that investing should be simple and transparent. Fidelity promises to guide customers and be with them every step of the way through their ISA journey.
A Stocks and Shares ISA, or an investment ISA, is a financial account that allows you to invest your money in a wide range of investments. These include individual shares, exchange-traded funds, bonds and investment trusts.
Investing money in a Stocks and Shares ISA can be a highly tax-efficient way to save for life’s significant moments. You don’t need to have vast amounts of money and can invest from just £50 a month. Making small cutbacks to your daily spending habits can make it possible for you to find £50 a month while barely impacting your life.
Act now before the end of the tax year!
The 2019/20 ISA allowance is £20,000, some or all of this can be used to invest in a Stocks and Shares ISA. This allowance allows you to invest money and have the benefit of not paying tax on your investment gains. You have until midnight on the 5th of April to open a new account. This can be done online so you don’t even have to pick up the phone unless you want to!
Find out more about Fidelity’s Stocks & Shares ISAs:
You can save monthly, quarterly, bi-annually or even annually with a Stocks and Shares ISA. Fidelity pride themselves on offering investments to suit every need. Find out everything you want to know about Stocks and Shares ISAs.
#Data is based on purchasing a shop-bought coffee each day for £2.50, for five days per week.
##Source; Fidelity International, February 2019 – based on a hypothetical illustration assuming a rate of growth of 5% a year, no initial charge, a platform service fee of 0.35% and an annual management charge at 0.75%.