What Should I give up so that I can Save Money?

If you want to increase the amount of money that you have in savings, then you may have to change the way that you spend to do so. You may normally spend all that you earn and then look to short term loans to tide you over. This can be tricky as many of us do not want to change our lifestyles dramatically in order to increase the amount that we have saved, but it could be our only option if we cannot increase our income. It is good to try a number of different things or at least just think about them, so that you can work out which might suit you the best.

Switch to cheaper providers

If you switch to cheaper providers then you will not need to necessarily change anything about the service that you are getting but you will pay less. This can apply to insurers, utility suppliers, phones broadband, television and things like this. Sometimes you can move to a cheaper package and find that there is very little difference between what you were getting before and what you get now. For something like insurance, there may be no difference at all. For television, you might get different channels, but you may prefer them to what you had before. It is worth having a look at what is being offered by other providers so that you can see whether you can switch to another, get a similar service and save money.

Switch to cheaper retailers

The same applies when you are shopping in a store. You need to think about whether there are cheaper places that you can go to buy the things that you are getting. Often you will find that there are similar products sold in cheaper places and this will enable you to be able to spend less. You will need to be careful of the quality as you will not want to pay less but not get such a good product as it may not last as long or be as good to use. However, you also do not want to be paying more than necessary for things and so if you can get what you normally buy at a lower price it will mean that you will be able to have the same amount of items but pay less for them.

Cut out what you hardly use

It is also worth thinking hard about everything you buy and question whether you really want and need those items. On bigger purchases this is more important, but if you do it with every item that you buy, then you could find that you will end up making lots of small savings that will really add up. Consider things that you may not miss, perhaps a magazine or newspaper subscription where you rarely get time to read them, a television subscription where you make very little use of the extra channels you pay for, food you buy that goes off and you throw away or insurance you pay that you never claim on. There could be all sorts of things which fit into this category.

Cut out what you don’t need

If cutting down as suggested above is not enough, then you may have to start thinking about cutting out things you do not need. This could include things that you really enjoy or really want and so it can be more difficult. You need to think about whether you are prepared to give up these things in exchange for being able to put more money in your savings account. Consider the advantages of having more savings, such as having money to fall back on so you do not need a loan in emergencies, saving up for specific items or just having that feeling of security that you have money behind you. Thinking of this might help you to find it easier to give things up as you will remember the reason that you are doing it.

Cut down on everything else

You may also need to cut down elsewhere as well. Obviously, we cannot go without essentials, but we may be able to reduce them a bit. We could try to use the car less, eat and drink less, buy less items for gifts, spend less on our hobbies or go out less. These things will have a significant impact on your life and you will need to think carefully about which you are prepared to do and whether you want to do them all or the time, just occasionally or anything in between.

So there are many areas that you can possibly cut down within, but you will have to think about whether you feel that these are areas that you are willing to sacrifice things or not.

How do I Afford my Child’s University Education?

Many parents worry a lot about the cost of university, both for themselves and for their children. Since the introduction of student loans there have been increasing concerns about the costs, especially among those that feel that the loan system can lead to unnecessary debt for graduates. However, it is important to understand how the loan system works now and how it might change in the future so that you can work out properly whether you can afford to help your children out and whether, in fact, you will need to.

How student loans work

Students are all leant enough money to cover their tuition fees. Their family income is assessed and they will be awarded a maintenance grant if it is felt they need it. This is to cover things like rent, transport, books and food, but it is only given to those from lower earning families. It is calculated on a scale, so depending on the household income you will be lent anything from the maximum amount to nothing at all. The amount will vary as it changes with inflation. Repayments are also means tested, with them being taken through tax once a graduate is earning beyond a certain threshold and the loan is written off after thirty years if the graduate has no repaid it all.

Proposed changes and what might change

There have been some recent changes to the student loan scheme which may come in within the next year but it will depend on whether they are approved by parliament. These include using some grants instead of loans for the least well-off students, reducing the course fees and for loans not to be written off after thirty years but after forty years. This means that more students will be likely to repay all of their loans as they will have to repay it over a longer period. However, with some of the students from the poorest family having a grant instead, although not for the full amount, they will not have to repay so much. The lower fees will also reduce what has to be repaid. It is hard to calculate but as many graduates were not repaying everything within the thirty-year period there may be more chance they will within the forty years and with fees being less and therefore less to repay, many more may repay what they borrow in full.

How parents have to help out

In better off households the students do not get so much maintenance grant. Without this money it would be impossible for them to pay rent and buy everything else they needed, even with a part-time job. This is where parents have to step in and help. They will have to make up the short fall if their want their children to attend university. Many people would say that it is fair that better off parents do this, but the parents still need to think about how they will be able to afford it.

How parents can afford this

There will be some families that will easily be able to afford to do this and pay rent for their children as well as give them money for buying what they need as well. However, some of the families that are less well off or have a lot of expenses of their own or several children at university at the same time could struggle. There are things that you can do though, as parents, to make it easier –

  • Choose local universities so children stay at home
  • Start saving from when they are young
  • Encourage children to save and earn to help themselves
  • Parents both work full-time, when they may not have done in order to support their children more when they were at school and living at home
  • Parents do evening or weekend work to get more money in
  • Parents downsize their home or sell things they do not need to generate some money
  • Parents get a loan to help out.

These are just a few suggestions that could be helpful. It is good to try to calculate exactly how much extra you might need and how much money you will save if they are not living with you. Your food bill will go down, but it is unlikely that much else will change really, so you may not save lots of money. They will obviously still need to eat, but also pay rent and utilities as well as books, transport and they will want some money for fun such as evenings out. Figuring out exactly how much this will cost can really help you and this will enable you to be able to do a better job of calculating how much you will need to provide for them, obviously after taking away the amount of loan that they will be entitled to.