Editor’s note: This article was first published in July 2018, and its prices and products are from 2018: low-flow taps at €9-15, a pack of cigarettes at €3.50, wedding dress and tuxedo rental at €200 a day, compact fluorescent bulbs (now largely replaced by LEDs), and Groupon and Groupalia coupons.
Sometimes the best way to make money is by saving it, because, as the saying goes, “a euro saved is a euro earned”.
By saving on everyday expenses, we can end up a few hundred or even a few thousand euros better off by the end of the year. We can simply use that money to build up our savings account, but we can also use it to pay for our next holiday.
Where can we save in our everyday lives?
We’ve already shared 5 tips to improve your personal finances, as well as some ideas for earning extra money even if you don’t have time to work overtime. Today we’re going to focus on ways to save on the everyday expenses we face every day.
See also: 38 ideas for making money from home without investing anything
1. Install low-flow taps
By installing low-flow taps both at the kitchen sink (where we wash the dishes) and in the shower, we can cut our water bill by between 25 and 60 per cent. Considering that a low-flow tap costs between 9 and 15 euros, it’s a good investment in the medium and long term.
2. Change your light bulbs
Replacing old bulbs with compact fluorescent bulbs (and other low-energy bulbs) can save us up to 40% on our electricity bill. It’s true that these bulbs cost more than traditional ones, but they use energy much more efficiently.
According to some experts, only 15% of the electricity used by a traditional bulb goes into producing light. The rest turns into heat, which uses electricity but gives no light. Just by changing about 15 bulbs we can save €60 a year and more than €600 over the bulbs’ lifetime.
3. Avoid “vampire” power
Most households switch off their electrical appliances (TV, radio, DVD player…) but don’t unplug them, so the standby light stays on. That small, almost invisible light costs each household about €100 a year on average. We can fix this by using power strips with an on/off switch. These strips, with 3 to 5 sockets, cost about €3.50, so once again the investment pays off.
4. Don’t use an electric water heater or a ceramic hob
There are some notable differences in what we spend on hot water and cooking depending on whether we use butane, natural gas, propane and so on, although any of these is much cheaper than an electric water heater for the shower, which can cost us up to 50% more.
Bear in mind that once we use up the hot water in the tank, the heater has to warm up the cold water coming in and then keep it hot, so the cost is out of all proportion. A simple electric water heater can cost us more than €1,000 a year compared with butane or natural gas.
See also: What compound interest is and how to get it in fixed income and equities
5. Bottled water?
A household of five that drinks bottled water spends more than €2,000 a year on average.
If the water in your town is good quality, this could be a big source of savings.
If the tap water in your area has high levels of limescale or heavy metals, a good investment is a filter that can be fitted to the taps themselves or to table jugs.
6. Use discount coupons
If you need to buy something, use discount coupons from Groupon, Groupalia or similar sites. Discounts can reach 90%, although the most common are big deals of 50% or 60% off. Depending on your habits and spending needs, the savings from these coupons over a year can be significant. Likewise, if you need to travel, look for low-cost trips; the internet is full of them.
7. Invest in a programmable thermostat
Programming the heating or cooling needs of your home can save more than €200 a year on energy. If you spend a lot of time away from home and want it to be at a comfortable temperature when you arrive, a programmable thermostat is the solution.
8. Check your tyre pressure often
Tyres at the wrong pressure don’t just make us use more fuel; they also compromise the vehicle’s stability and shorten the life of the tyres.
9. If you live in Spain, fill up your car on Mondays
It’s no secret. Mondays are when fuel is cheapest, because that’s the day the European Union checks that prices are in line. By Tuesday prices have already gone up when you fill the tank. Avoid filling up at weekends, especially before a major public holiday, because prices shoot up. Filling your car’s tank is like investing in the stock market: you have to know when to buy, and that way we can save more than €200 a year on fuel.
10. Ride a bike
Cycling is becoming much more popular. If the distance to your workplace and its location allow it, leave the car and ride a bike. You can save more than €1,500 a year with this simple step, and get healthier too.
Other ideas for saving
Tobacco
If you smoke, quitting is clearly not easy, and it’s one of the vices that comes with the most costs, many of them hidden. With tobacco you don’t just burn money on the price of the pack, but also on medicines, because smoking makes you fall ill more often than a non-smoker. Let’s put the average price of a pack at €3.50 (and few brands are that cheap any more).
If you smoke a pack a day for a month, you’ll have spent an average of €105, which multiplied by 12 months brings your spending on tobacco to €1,260. That amount would be very useful in a savings plan.
Alcohol
Who doesn’t fancy a drink at the weekend or a few beers at lunchtime on a terrace? We don’t have to stop doing it; we just need to slow down. Ideally we wouldn’t drink alcohol at all, but there you go. A middle-class family spends an average of 150 euros a month on bars and weekend outings. If you manage to cut that figure in half, you can still spend €75 and save an average of €900 a year.
A healthy diet and exercise
A lot of spending happens out of boredom. I won’t go into the benefits and savings of a healthy diet, which you should combine with the habit of exercising. One of the cheapest and healthiest ways to exercise is running. Running costs nothing and encourages saving, not to mention that a healthy body keeps the mind clearer and more open when it comes to finding new ways to make money.
Negotiate terms with service providers
Banks and insurance are two sectors we’ve never really sat down to analyse, and today we can come out ahead with them. Insurance companies, eager to win new customers, are offering better terms to other companies’ customers. By shopping around and comparing the insurance market today, whether for your home or your car, you can save an average of €100 a year in total. It’s not much, but it’s yours.
The same goes for banks. By switching banks, you can get rid of maintenance fees and even get up to 2% back on your main household bills such as electricity, water, gas, phone and so on.
In short, by carefully reviewing bank terms you can save more than €70 a year.
Likewise, compare the prices of your electricity company, phone operator, internet provider and so on.
More ways to make money by saving
In a previous article we talked about how to make money from the gold mine you have at home without knowing it, starting with your basement: an old bike, an old computer, clothes and so on.
Printer cartridges
You probably don’t know how much you could be paid for the printer cartridge you throw in the bin. An empty printer cartridge can fetch €6–25, depending on the model. You just have to sell it to a cartridge manufacturer.
Mobile phones
Why throw away your old mobile when you can get paid for it these days? When you sign a mobile contract you’re usually given a state-of-the-art phone, or there are the ones you buy on prepaid plans. The point is that today you can go to companies that will buy your old smartphone, or you can even sell it on Wallapop, eBay or Facebook.
Jewellery and valuables
Clearly, one way to make money right away is to sell luxury items such as jewellery, gold, silver and watches, and even antiques such as lamps, trousseaus, coins and banknotes. They may have sentimental value and you may not be paid what they’re really worth, but sentimentality doesn’t pay, and those items can give you capital that, turned into cash and invested well, will earn you higher returns.
Get to know eBay
eBay is an online buying and selling site where the things you least expect anyone to want will sell within days, as long as the price is reasonable: old films, comic collections, original DVDs, vinyl records (especially Michael Jackson’s).
eBay is a very attractive source of income. I mention eBay because it’s the best known, but many others in the same line of business have appeared.
Rentals
Some companies and clothing shops rent out wedding dresses and tuxedos for €200 a day. Would you rent out your wedding dress for €100? Setting feelings aside, I think it’s a good way to make some money while helping a bride save.
What goes for the wedding dress also goes for a computer, or your own car if you have one you hardly use, and anything else you can afford to rent out to meet someone else’s temporary need. You can even rent out a space in your home or a room.
There are a thousand ways to save. By following a few simple steps, opening your mind and drawing up a family financial plan, you can end the year with more than €3,500, more than 50% of which used to be expenses, so your finances would improve by around €5,000. That’s no small sum.
That said, part of your financial intelligence should go into making your savings work for you. You can invest in deposits, interest-bearing savings accounts, index funds and a wide range of risk-free financial products, earning a return on your savings that you didn’t have before. When you’re ready to take on other kinds of risk, there are other investments such as equity funds, shares, mutual funds and so on.
In a previous article we talked about bundling all your family’s insurance policies to get better terms and discounts from insurers, as well as renegotiating terms with your current bank and, if you’re not happy, moving to an online bank, where there are usually no fees.
We’ve also covered the benefits of bartering. If you need something and have something to offer in return, you can save large amounts of money.
See also: 11 ideas for saving money on small things that add up over the year
Further reading
Featured image: Xofc, CC BY-SA 3.0, via Wikimedia Commons.
