FOOL'S EYE VIEW
Fifteen Fabulous Money-Saving Tips!

By Cliff D'Arcy
November 1, 2005

Money-saving articles tend to be the most widely read here on the Fool website, no doubt due the constant barrage of rising debts, taxes and bills we've all had to endure in recent years. So, without further ado, here are fifteen ideas that I've come up with which will help anyone (including you and me) to put their finances on an even keel:

1. Kill your mortgage bill

For most homeowners, the monthly mortgage repayments are their largest single expense. Sadly, about half of all mortgage borrowers are paying far too much interest, because they haven't shopped around for a lower interest rate. Remortgaging (demanding a better deal from your existing lender or moving your home loan to one of its rivals) could easily save a typical borrower £1,500 a year. That's enough to pay for a decent family holiday! Learn how it's done in Cheaper Loans Mean Happier Homes!

Check out the magnificent mortgages in our Mortgage centre!

2. Only use cash for a month

This may sound a little old-fashioned, but have you ever tried putting aside your plastic and living on cash for, say, an entire month? This is something that I tried as part of my extreme budgeting challenge in January of this year. By not constantly making cash-machine withdrawals and leaving my credit cards at home, I spent less than £40 on top of my usual monthly bills. Also, I plan to start keeping a spending diary, in which I'll record every single penny of my expenses. That should be an eye-opener! Learn how to budget here.

3. Steer clear of rip-off protection

Insurance is a gamble: sometimes you win; other times you lose. However, certain insurance policies are so over-priced that you're almost guaranteed to fail. Take, for example, payment protection insurance, which has built-in profit margins of 80% or more. How about extended warranties, which can cost half as much as the goods they protect? Or, indeed, any insurance cover bought from high-street banks, which often charge premiums three times higher than Best Buy providers do?

Slash your life, health, home, motor and travel premiums in our Insurance centre!

4. Save a fortune on car servicing and repairs

When the block exemption agreement was abolished in October 2003, it broke the ties between car manufacturers, dealers and servicing. This means that garages can compete with each other across all makes of vehicle, and consumers are free to shop around for parts, servicing and repairs from any garage. For example, my wife saved £112 by having a local independent dealer service her car: this garage charged £143, whereas the local Renault dealership wanted £255 for exactly the same work! Drive down your motoring costs with these Ten Routes To Cheaper Motoring.

5. More than halve the cost of your life insurance

Ever heard of FIB, or family income benefit? It's a simple form of life insurance policy that pays out a tax-free monthly income when you die, rather than a one-off lump sum. This difference makes FIB much cheaper than level term insurance, which is what most of us use to protect our family if we die. Indeed, FIB premiums can be less than half those charged by a comparable lump-sum life policy. However, you can't use FIB to cover a mortgage or other debts, because it doesn't pay out a lump sum. Furthermore, smokers who kick the habit for a year or more can qualify for non-smoker rates, which can dramatically reduce their premiums.

Check out the cut-price premiums in our Insurance centre!

6. Go green and ease your energy bills

If you haven't changed gas and electricity suppliers - and two-thirds of us never have - you're missing out on a saving of around £200 a year. What's more, you can cut your energy bills by a fifth (20%) by being more energy conscious. That could mean another £120 a year in your pocket, as this article explains.

Find out how much you could save with uSwitch!

7. Crucify your credit card

Currently, the UK's total credit-card debt is a gigantic £56 billion, which comes to £2,240 for each of the UK's 25 million households. About three-quarters of this debt is interest-bearing and, at a typical interest rate of say, 16% a year, it's costing a typical household almost £270 a year in interest. If you carry forward a balance from one month to the next, try shifting your plastic debts to a delightful 0% credit card. This will give you a breather from interest lasting up to a year, which means that you can pay off those pesky debts earlier!

Check out the cracking 0% cards in our Credit Card centre!

8. Hammer your home telephone bill

If you make local, national and international calls and call mobile numbers using BT or most other phone companies, you're probably paying well over the odds. That's because 1899.com offers an massively cheaper service: for example, it charges just 3p for any geographical UK call (those beginning with 01 or 02) of any duration at any time. By using a similar service (from Call18866), my monthly phone bill has plunged to around £3! Learn more in Six Ways To Cut Your Call Costs.

9. Punish your personal loan

If you have a personal loan, you may find that you can save money by replacing it with a cheaper loan, particularly if you borrowed this money without shopping around first! Indeed, Best Buy personal loan providers offer typical rates of less than 6% a year, which make them massively cheaper than high-street lenders. Before you set out to reduce your monthly repayments or find a new loan, read my Five Tips To Choose A Loan.

Feast your eyes on the Best Buy loans in our Personal Loans centre!

10. Give up the dreaded weed

Last week, I paid £5.15 for a packet of twenty cigarettes, which means that these cancer sticks cost me more than 25p apiece. I hate smoking and would love to give up, but I've found it almost impossible to stop. However, smokers who stop a twenty-a-day habit would prevent £1,880 a year from going up in smoke, which is some saving! If you want to quit, visit the Giving Up Smoking website.

11. Double your savings interest overnight

Let's say that you have £3,000 in an unremarkable savings account - one that pays, say, 3% a year before tax. Your gross (pre-tax) annual interest is £90 but, after basic-rate tax of £18 (20%), this falls to £72. Higher-rate taxpayers lose another £18 to the taxman, leaving them with just £54. However, by switching this cash to a tax-free savings account that pays, say, 5% a year, you'd earn £150 in your first, which is more than twice as much. Result!

Check out this Best Buy tax-free savings account!

12. Buy goods and services cheaper online

When I go shopping, I always use what I call the "stop before you shop" rule. I ask myself whether I really need this item, whether I'm paying a fair price, and whether I could find it cheaper by shopping around. Often, I'll go home, fire up my PC and start surfing the Internet to find the same thing at the lowest possible price, which can mean a saving of 50% or more. I listed almost all of my favourite shopping websites in Save A Fortune When You Spend.

13. Dynamite your debt problem

If you're struggling to make ends meet, and have stubborn debts that just won't budge, pay a visit to our Get Out of Debt centre. If you're really worried about your debt pile, contact a no-free debt-counselling service, such as the Consumer Credit Counselling Service, National Debtline or Payplan. Also, you'll find friendly support from many people in the same situation (and those who've defeated their debts) at our Dealing with Debt discussion board.

14. Earn discounts instead of paying fines

Although I pay all of my monthly bills by Direct Debit (DD), I know that many people are afraid of these automated bank transfers. Some consumers are reluctant to "hand over control" of their bank account to any organisation, despite the existence of the DD guarantee. Personally, I find DDs incredibly useful, because they do three valuable things for me. First, they give me discounts on my bills - the maximum saving can be as high as £200 a year. Second, by paying bills automatically, they make up for my sieve-like memory and save me from being fined, say, £25 for not paying my credit-card bill! Third, I can use DD to pay off my credit-card balance in full every month, which means that I never have to pay interest. That's why I'm a big fan of Direct Debit!

15. Earn 4.17% in a day

Here's a little trick that I first mentioned almost two years ago. If you buy supermarket saving stamps at the right time, you can make 4% or more straight away. For example, ASDA's Christmas Savings Card pays its annual bonus on 21 November. So, if you want to be cunning, go into your local store on 20 November and buy £144 of electronic savings stamps. The following day, you'll receive a bonus of £6 and have £150 to spend on Christmas goodies. That's an overnight profit of 4.17%, which is a fantastic return. You'll find similar schemes at Budgens, Iceland, Kwik Save, Morrisons, Somerfield and Tesco.

Check out the star savings accounts in our Savings centre!

That's it from me - I hope these tips help to boost your Christmas budget!

More: Get better credit cards, personal loans, mortgages, savings accounts and insurance today!