10 Top Tips for getting out of the Red and into the Black: Tips 6 to 10
08 September 2007
6. Transport. We all need to get there, and this article is not about getting people to give up their cars or anything that they feel they might need. But, what if, instead of driving a mile to the shops three times per week, you walked that mile? Instead of getting taxis home at night, you get on the bus or walk (subject to distance and safety)? You might need your car to get to work. That’s fine, but how about car sharing? Not only will you save money by taking it in turns to drive you will also be helping to reduce global warming and road congestion so you can feel good about yourself at the same time. Assuming that you currently do average mileage (around 12,000miles per year) and that you car will do 35 miles to the gallon, at current fuel costs of around £0.95 per litre you will spend £1480 per year on fuel alone (which is around £2200 per year in before tax earnings). If you could reduce your mileage by 20%, no only would you reduce wear and tear and depreciation on your vehicle, you would also save around £300 per year on fuel – just for walking to the shops and sharing lifts to work.
7. Nights out. If you’re still reading this, you might be forgiven for thinking that everything above is easy. I hope you are thinking that, because with a little bit of effort you can achieve all of these things. But how do you reduce the cost of nights out. After all, you’re young and you want to have a social life. The easiest way is to cut down on the number of nights out that you have. Why not make a promise to yourself to stay in for one weekend every month, or cut out those Tuesday night pints down at the local pub? You could even go down to the local pub and instead of drinking your usual, opt for tap water or orange cordial. You could easily rack up savings of quite a few pounds for very little effort.
8. Clothing and CD’s. Many impulse purchases that rack up on credit card bills revolve around the amount spent on clothing and CD’s every month. I’ve seen television programmes where people are introduced to cheaper stores to buy their clothes from, or are challenged to spend only £100 per month instead of £200. I’ve never agreed with this principal. This is the first time when you have to be really honest with yourself. If you have built up credit and store card debt from buying clothes and CDs every month, I’d be willing to bet that you have loads of clothes and CDs at home. So stop buying them. Your budget is now zero. Why not try wearing some of the clothes that you have and listening to some of the CDs. Those that you don’t wear or don’t listen too because they were impulsive buys even by your standards go back and read point 4.
9. Share accommodation. This is a real lifestyle change. We’ve already looked at reducing household bills by changing suppliers. What about reducing them further by sharing them with somebody else, and getting somebody to help with the rent or mortgage? If you have an monthly financial deficit and you are lining in either your own home or a rented home that has a spare room then you could make a monthly swing of several hundred pounds by letting that room to a friend. If you don’t know anybody who wants to share with you, there are house share websites such as www.abodewithme.com where you can sign up to meet new housemates who are looking for accommodation in your area. You don’t have to take just anybody – you can read the profiles and really get to know potential new housemates before they move in. This is a potential gold mine for you if you have a spare room, and what is even better about this is that the government allows you to earn up to £4,250 per year for letting a furnished room in your home, tax free. This doesn’t include any contribution that your lodger makes towards bills, but £4,250 tax free is the equivalent to about a £6,500 per year before tax pay increase which for most of us is just a pipedream!
10. Earn more money. I know that you alre
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