Editor’s note: This article was first published in March 2018. The prices and amounts are from that year: smartphones under 200 or 100 euros, savings of over 400 euros a year from bundling TV, internet and phone, bank insurance of 3 to 25 euros a month, and the author’s spending of over 400 euros a month in bars and cafés.
As you know, if we have to choose between saving and earning more money, we should always choose earning more, and that way we can avoid having to hunt for ways to save. Here are some ways to make extra money.
But it’s a good idea to start with frugality and saving until we find those new sources of income. So, in keeping with our focus on financial education, here are some ideas you can put into practice to save a considerable amount of money over the course of a year.
And remember that “small leaks sink big ships”. But don’t worry: this time we’re not going to suggest you stop using toilet paper.
How to save more money: some ideas
1. Your phone contract
Most people pay more than they need to for their mobile phone contract. Sometimes it’s a matter of asking yourself whether you really need a high-end smartphone (which we usually pay off in instalments on the bill) or whether you could get by with one of the many smartphones available for under 200 euros. You can even find some for under 100 euros. When it comes to a recurring payment for a service, don’t think in terms of monthly savings; look at it in terms of annual savings, because it all adds up.
2. Bundle your services
Closely related to the previous point: since I bundled my TV, internet, landline and mobile phone, I personally have managed to save more than 400 euros a year.
See also: Money and inflation: the number one mistake people make with their money when prices are rising
3. Put off a big purchase until next month
Procrastination is the enemy of success, but in financial education, procrastination is our greatest ally. If you’re thinking of buying a bigger TV, a new phone or some new gadget, just wait 30 days.
Once those 30 days have passed, two things will probably have happened. First, the price of the product (especially if it’s tech) will have come down. Second, you may realise you don’t really need it and skip the purchase.
4. Avoid brand names and buy generic (with exceptions)
Personally, I never skimp on shoes, and I prefer to pay a bit more for dress shirts. I even used to pay a bit more for ties, until I realised that most people can’t tell whether a tie is expensive or cheap.
But for the vast majority of products, it can pay to buy second-tier brands, and even supermarket own brands for some items, such as personal hygiene products and pet food. It’s a question of working out your priorities.
5. Take a look at your insurance policies
If you recently took out a loan, or have a card with some kind of credit, you probably have an insurance policy with your bank that can cost anywhere from 3 to 25 euros a month.
As for family insurance, as we’ve said before, a family of five can have a lot of bargaining power with an insurance company if everyone agrees to move their home insurance, car insurance and so on to it.
Just talk to an insurer and put the idea to them. You’ll probably save a lot of money between you if the insurer gives you a discount for covering the whole family.
6. Cut down on trips to bars and restaurants
Going to the bar with friends is clearly a way to socialise, but I suggest you start by writing down how much you spend each month in bars, cafés and restaurants. Last month I personally spent more than 400 euros on coffee, drinks and a few dinners.
Eating out with friends, even just twice a month, can add up to a lot of money over a year, and you might have just as much fun getting together at home and ordering pizza.
7. Only buy something new if you’re going to throw out the old
It’s very common to hear people, especially women, say they have nothing to wear even though their wardrobe is bursting at the seams, and none of their 12 pairs of shoes will do either. In this case, you need to set yourself a rule: “No buying for the sake of buying. If I buy, it has to be a replacement.”
In other words, if you buy a new dress supposedly because the others don’t fit, you have to throw one dress out before buying the new one. The same goes for shoes, handbags and so on.
As soon as you have to open your wardrobe and decide what to throw away, you’ll probably find it hard to part with anything, and you may well conclude that you have more than enough to wear.
(See: 8 signs that you could be a compulsive shopper)
8. Pay yourself first and split the rest into weeks
The idea of paying yourself first may have been distorted. Anyone with a savings plan sets aside the planned amount (200, 300, 1,000 euros…) as soon as they get paid, and covers the usual bills (mortgage, electricity, phone…) with what’s left.
We then split the money left after the usual expenses (with our savings amount already taken out) into weeks, so you might end up with 60 or 90 euros a week to spend.
Divide that into days and you’ll know what you can spend each day, although you should try to have as much as possible of your daily budget left over each day.
Try doing this literally.
There are people who have between 50,000 and 100,000 euros saved, and if you suggest a week’s trip abroad, they’ll tell you they can’t afford it. Some people think, “How ridiculous and stingy, with all that money saved.” But the truth is that they have that money saved precisely because they say NO to this kind of thing.
9. Have a no-spend day once a week
Pick one day a week on which you won’t spend a single euro. Not even on a coffee. That’s the challenge. If you work away from home and usually eat at a restaurant, that day it’s a sandwich from home.
See also: 5 money conversations to have with your partner before you get married
What’s the point? First, and least important, the savings from one day a week (four days a month). But the real aim is for you to be creative and enjoy that day without spending any money. Why? Because statistically, people who can’t be happy without a euro in their pocket aren’t happy with 100,000 euros in the bank either.
10. Negotiate the price of anything you’re going to buy
We’ve already shared 9 tips on how to negotiate the price of any product you buy. Almost everything is negotiable if you know how. That way, we not only save money but also train our negotiating skills.
We can also use these points to make some money
11. Sell something online (eBay)
If your saving is on track, it’s time to move up a level and also start making some money by selling things you don’t need. Earlier we said that before buying a product, you should get rid of the old one.
So here’s a new challenge for you: don’t buy that new product until you’ve managed to sell the old one. First we build in some procrastination, and second, we learn that the internet can help us make money, not just “snoop around on Facebook”.
12. Use one of your skills to make money
This whole process leads us to the need to look for ways to earn more money. I always insist that everyone has a skill, and these days, thanks to new technology, if you know how to do something, you can make some money from it. It may not be much, but the point is to get started.
We should always be looking for new ways and channels to earn more money. Here are a few articles on easy ways to make money online, plus some others you may find interesting:
Featured image: Juan Fernández, CC BY-SA 2.0, via Wikimedia Commons.
