Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
When to Save and When to Splurge
Moneymagpie Team
11th Aug 2020
We’ve all heard of ‘false economies’ – but where can you really afford to save on products and when should you spend a little extra? Knowing when to splurge and when to use frugal strategies can save you a LOT of money in the long term.
From household bills to groceries, here’s our take on when to save and when to splurge!
- Household Bills
- Technology
- Mobile Phones
- Clothes
- Groceries
- Holidays
- Cars and Travel
- More Ways to Save
Household Bills
Why would you ever pay more than you had to for your electricity and gas?! Normally, we always advocate you try to switch your energy bills each year (or at the end of your fixed tariff) to make sure you’re getting the best deal.
When to splurge
However, if you’ve got a little extra cash to spare, consider opting for a green energy company. Providers like Bulb Energy have one set tariff for everyone – which might be a bit more expensive than your current provider. But, as it’s all renewable energy, you’re helping offset your carbon footprint!
If you can afford to switch to a green energy supplier, do so. It helps the environment AND your conscience!
How to save
As well as switching suppliers, look at other ways you can reduce your utility bills. For example:
- Always switch lights off when you leave a room
- Turn appliances off at the wall rather than leave on standby
- Use LED energy-efficient bulbs
- Install a water meter
- Avoid using the tumble dryer
- Boil only the water you need for a cup of tea rather than the whole kettle
- Turn the thermostat down two degrees.
All of these are small changes you can make that’ll quickly slash your utility bills!
Technology
Do you REALLY need the latest Macbook Air? Or will a simple Chromebook suffice? Perhaps your children are badgering you for the new Playstation or Xbox console – but could you save by getting an older version?
When to splurge
Whatever tech you need to buy, think about what you REALLY need it for. If you need a reliable workhorse of a laptop, for example, that you need to use 8 hours a day, every day – then it’s worth investing in something that can keep up with you.
How to save
If, however, you want to entertain the kids with a console (for example), look to buy second-hand. Shops like CEX test their second-hand items so you can be sure they’ll work. You can save a LOT of money this way – especially if you trade in your old tech to get vouchers towards your next purchase, too. If your child needs a tablet or laptop to carry out their schoolwork, a second-hand device will often do everything that’s required. There’s no need for latest models or super-high processing power if they just need to have a version of Word (or Google Docs, which is free!) and internet access.
Mobile Phones
We’re always tempted to upgrade our phone when the two-year contract is over… but do you really need to? Doing this – especially if you also have children with phones – can get VERY expensive over time.
When to splurge
If your mobile phone is several years old (not just two), it could be time for a full replacement. Look for features that’ll keep your new phone in tip-top condition too, such as those that offer waterproof protection. Always buy a protective case and cover for your phone, too.
How to save
You don’t always need a new phone even if your contact is over. If you’re happy with the phone you’ve got, and your contract is coming to an end, switch to a SIM Only deal. You can get fantastic deals, such as unlimited texts and data, for FAR less than a contract that comes with a phone.
Even better, SIM Only deals are on 30-day rolling contracts – so when you finally decide to upgrade, you don’t have to buy yourself out of a lengthy contract. You can also trade in your old phone when you decide to upgrade to save even more money.
Look for the less feature-heavy models, too. Go for a Samsung S10 instead of an S20, for example: it’s much cheaper but the features aren’t majorly dissimilar for everyday users.
Clothes
We’re all a little bigger around the edges thanks to lockdown, so it’s tempting to go out and buy new comfy clothes that fit. However, there are times when you should spend more to save more in the long term.
When to splurge
Splurge on seasonal items that’ll last a very long time. Heavy winter coats, comfortable boots or shoes, or a smart business jacket will all take you through many seasons. The cost-per-wear formula is a good budgeting tool:
Times per week you expect to wear the item x weeks in the year
Divide this figure by the cost.
A Primark coat that you wear twice and costs £20 is more expensive than a high-end £200 coat you wear three times a week for four months a year – over ten years!
How to save
While fast fashion isn’t sustainable, sometimes we need it to keep us clothed when budgets are tight. Shop as ethically as you can: buy second-hand clothes from charity shops, or look for fair trade cotton products (or alternatives like bamboo fibres).
If you need something for a one-off event – let’s say a fancy dress party – look for second-hand or online discounted options. Save on accessories, too: most people won’t notice whether you’re wearing diamonds or glass!
Groceries
We’ve all seen the supermarket adverts. “I like this one… but I also like this one”, where the second is much cheaper.
Supermarket shopping is a surprisingly personal preference. Over time, it’s easy to get sucked into marketing and branding ploys without even realising it – so you could be spending a lot more than you need to!
When to splurge
Meat is very expensive these days – and organic meat even more so. However, if you want to have quality food, it’s better to spend on one or two really great cuts of meat for the week instead of lots of cheaper options.
If you’ve got a real love of a certain type of chocolate, ketchup, wine, or whatever, keep buying that, too! Swapping for own brand does save money – but a little luxury in our favourite foods goes a long way to boost morale.
How to Save
You can save a LOT of money grocery shopping simply by ditching household names and going for own-brand varieties instead.
Shop in the tin aisles and the frozen section, too. Not everyone has access to a freezer, but if you do, look at vegetables and meat from this section. You can save a lot of money – and as it’s frozen, buy in bulk to make several meals from one purchase.
Tinned food is versatile, fresher than you’d think, and cheap. SortedFood do some great videos to show you what can be made with a few tins of food!
Only go for offers like buy-one-get-one-free if you’re actually going to use the item. For example, toiler paper, washing up liquid, laundry detergent, pasta: they’re all things we use all the time. You know you’ll use it so – if you have storage space – stock up when deals rock up. If it’s not something you use regularly, put it back on the shelf and walk away.
Bulk-buying pantry ingredients, or making lots of portions of a meal to freeze, also helps to reduce your annual grocery bill. If you don’t have the space to shop in advance, try buying less at a time and popping to the shop regularly to check out the ‘yellow label’ section – things are often heavily reduced if the sell-by date is the same day.
When to Splurge and When to Save: Holidays
A big sticking point mid-pandemic is the subject of holidays. Do you book a last-minute bargain and risk getting it cancelled (and struggle to get a refund)? Or is it a wait-until-next-year situation?
When to splurge
Splurge on distant plans – and invest in comprehensive travel insurance at the same time. We have no idea how the coronavirus pandemic is going to pan out right now – but hopefully, travel will be back to normal by summer 2021.
Make sure your purchase is ATOL protected – and pay with a credit card – to protect you if the travel operator goes bust.
How to Save
UK staycations are where it’s at this summer and into next year! Camping holidays are a great way to save a LOT of cash, especially for families. Or, book city breaks to see new parts of the UK on a budget.
The good news is that, as hotels and attractions start to reopen, they’re desperate for customers. That means it’s easy to find amazing deals on sites like lastminute.com to save a bunch of cash.
Cars and Regular Travel
Travel – whether it’s daily commutes or weekend trips – all costs a lot. The small expenses, like parking, quickly add up.
Consider if you actually need a car – or if you could save money by cycling or walking most of the time. It could save you thousands of pounds each year!
When to splurge
Families often need a car to transport children from place to place. It’s worth investing in one that your family fits in comfortably and will be reliable for a long time. Buying a cheap second-hand car is often a false economy – there’s nothing worse than breaking down on the motorway with your kids in tow!
You should also not skimp on your annual car maintenance expenses. Yes, we know, sending it for a service is a pain and costs a lot – but it’ll save you a failed MOT and make sure it’s not going to break down on you.
How to save
If you only use your car once a week or less, consider signing up to a car club instead. Companies like ZipCar and Enterprise run city hire schemes: book a car that’s parked on the street near to you, hire it by the hour, and return it to the same spot when you’re done. This can save you hundreds of pounds each year!
Look for the cheapest parking at your destination, too. Parkopedia lists all the places you can park – as well as the prices. It’s often worth parking ten minutes away from your destination and walking the rest – saving you lots of cash each time.
Use a supermarket loyalty card scheme to earn points to spend on fuel, too. Over the course of a year, this can really add up and save you a lot of cash. Make sure to also do your grocery shop FIRST – sometimes supermarkets run deals that give you 5p or so off each litre of fuel with your receipt.
Shop around for your car insurance every year, too. It’s – weirdly – often cheaper to go fully comprehensive than third-party only, so make sure you check the different prices available. Never auto-renew as this gets VERY expensive!
More Ways to Save
We’re all about saving money at MoneyMagpie – so you’ve got a ton of helpful articles to choose from! These are our latest favourites that could save you a bucketload of cash over the course of a year.
- How to Have a Cheap Holiday in the UK
- Top Discounts for Family Activities This Summer
- Camping Hacks for a Budget Staycation
- 15 Frugal Living Tips to Save £5000 a Year
- 7 Surprising Discounts for Disabled People
- Green Habits to Save Cash and the Environment
Turn off tumble dryer, only if my wife listens. overall good points.
Another good article. Thanks.