The credit crunch has forced many of us to make fundamental changes to the way we spend our money. No longer is it acceptable to blow your entire pay packet on new clothes, the latest electronic gadget or lavish nights out. Instead, many of us are funnelling more of our money into savings accounts or our mortgages, and cutting back on purchases and expensive entertainment.
Of course, it’s near impossible (not to mention, undesirable) to stop spending money altogether. Instead, being a little bit more astute about opening your wallet or producing your debit card, is the best way to stretch your salary. According to research from Abbey, savvier spending on both essential and discretionary purchases is saving Britons an average of £1,746 each a year.
The research claims that people who reform their spending habits are able to save £17 a week on food, £19 on entertainment and £229 on holidays.
Callum Gibson, head of credit cards at Abbey, says: "At a time when people's finances are becoming ever more stretched, it's not surprising that Britons are becoming more astute about how they shop and are prepared to shop around and economise to make their money go further.”
According to Flame Tree Publishing, giving up your spending habits of old doesn’t have to mean going without. Its guide to beating the credit crunch, ‘Shopping on a Budget’, offers hundreds of tips on how to bag retail bargains, cut your shopping bills and make your money go further.
Step 1: Online tools
The internet is one of your greatest friends in the battle against excessive spending, as it enables you to easily shop around to find the best price or alternatives to more expensive items.
Using price comparison websites, for example, can help you save money on everything from financial products like insurance, retail purchases and even utility bills. There are literally hundreds of these types of websites – but while this means plenty of choice, it can also be a bit confusing.
Generally speaking, it’s best to always use several different websites to ensure you are really getting the best deal. For financial products, it’s also worth contacting firms directly – Norwich Union, for example, no longer offers its insurance products on third-party websites.
And don’t forget to read up on the policy or product details before you buy. You may find the cheapest deal isn’t necessarily the best product for you. Try Moneywise's Compare & Buy tools for savings, credit cards, ISAs, mortgages and insurance.
High street shopping can be dangerous – for one, the temptation to spend more than you intended to can prove too much, with stores employing clever tricks (such as relaxing music or scents) to encourage you to spend. In addition, prices might be marked up as retailers try to cover their costs.
Of course, some items you might want to see, try on or test physically before you buy them. A quick trip to your local high street to see if the purchase is really want you want or need is probably a good idea, but do go online before you buy as you might be able to get it cheaper elsewhere or over the web.
When it comes to retail purchases, don’t just look at different stores’ websites to find bargains. Shopbots, such as Kelkoo.co.uk and Pricerunner.co.uk, scour online retailers for you, making them a quick and easy way to find the best deal online.
A quick word of warning, however. Both Kelkoo.co.uk and Pricerunner.co.uk automatically categorise items by ‘popularity’ so make sure you change this to price before you start searching. Read more tips on shopping in the sales
Households bills – such as broadband, gas and electricity and even food – can also be slashed by using comparison websites. Again, make sure you use several sites to get an accurate picture of what you could save and check out the small print before you sign on the dotted line.
The cost of your holiday can also be reduced by shopping for flights online.
Step 2: Discounts
Many shops have been holding extended sales or discount days to encourage consumers to spend. Special offers in supermarkets have also become more prolific, and restaurants have got in on the action by offering cut-price menus.
Keep an eye open for special offers and ask friends or work colleagues to share their retail secrets. You can also go in search of your own bargains by taking advantage of voucher websites. From buy-one-get-one-free discounts, to free delivery or money off when you spend a certain amount, these vouchers can save you money on shopping and entertainment.
You can download vouchers on the Moneywise site - and also search for offers in your area.
Or VoucherCodes.co.uk and myvouchercodes.co.uk are two of the most popular websites offering vouchers. Other places to find vouchers are on the back of receipts and bus/cinema tickets, in magazines and newspapers and via online newsletters.
Also read the terms and conditions carefully – some vouchers may only be valid on certain days or in selected stores. Restaurant vouchers also tend to have exclusions, such as on wine and other alcohol.
There are also an increasing number of fake vouchers being circulated. Check the voucher carefully to see how it is produced or if there is any important information missing – if in doubt, give the store in question a call to check.
When in search of retail bargains, don’t ‘discount’ discount stores – TK Maxx, for example, sells end of range fashion and homeware products from top designers and famous label manufacturers from across the world. Factory shops, warehouse stores and shopping villages can also help you save money. John Lewis, Monsoon, Paul Smith, Calvin Klein and Burberry all have outlet stores, and you can find warehouse sales by registering with websites like fashionconfidential.com.
Other places to pick up retail bargains include police auctions (visit bumblebeeauctions.co.uk) and auction TV shopping channels. Or, why not ditch shopping, and swap unwanted items with people instead?
Step 3: In the supermarket
Food shopping tends to eat up a lot of our weekly budget; yet how many of us end up chucking out vast quantities of out-of-date food or unwanted leftovers?
The easiest way to save money on a supermarket shop is simply to buy less. Think about exactly how much food you are going to need during week, taking into consideration days where you might be eating out or, indeed, having friends over for dinner. Think about what meals you are likely to eat each day, and list ingredients you will need. Making extra and taking the leftovers for lunch (or heating them up the next evening) are also good ways to cut back.
Read more ways to be economical with the food you buy
When out shopping, look out for discounts and special offers but don’t buy unless you really need the food. Meat that freezes is a good idea, as is store cupboard food that lasts for a while.
Dropping a brand can also help you save plenty on a weekly shop. Supermarkets are currently pushing their own-brand items, and this is often cheaper and just as good quality as the alternatives.
Changing supermarkets is another option. Asda is often the cheapest place to buy produce, but you can check on websites such as mysupermarket.co.uk. Buying fruit and vegetables at a local store can also be cheaper than heading to the supermarkets, so consider splitting your shop if necessary.
Don’t forget to sign up for loyalty cards. Over time, these allow you to build up points that can be redeemed down the line.
Discover more ways to keep your food bill looking trim
Step 4: Flights and travel
Booking your flight online is a good way to save money, as long as you do it properly. Generally speaking, it tends to be cheaper to book flights as far in advance as possible, but last-minute deals can also save you plenty. Be flexible about your departure dates and times and consider comparing how much flights from different airports cost. Just make sure you take into consideration the cost of travel to the airport, or parking if you plan to drive.
Use websites like Kayak.co.uk, cheapflights.co.uk, and travelsupermarket.co.uk to search for the cheapest flights, but also check out flight brokers such as expedia.co.uk and travelocity.co.uk as these often have special offers with airlines.
Take extra costs such as luggage into account and consider paying with an Electron card, as you may have to pay a fee for using a credit or debit card. Read our guide to holidaying without breaking the bank
If you are looking for a cheap train ticket, take advantage of a trick called split-ticketing. This is where it is cheaper to buy two singles than a return. Train companies might not advertise this, but websites such as thetrainline.co.uk allow you to compare prices to see which option is cheapest. Don’t discount taking a coach instead of a train – it may be slower, but if you aren’t in a hurry then it is likely to be cheaper.
Alternatively, if you are travelling with a group of people, driving might be cheaper.
Step 5: Cashback
If you need to shop, why not see if you can make money from doing so? Cashback websites allow you to buy from a range of high street stores, including Marks & Spencer and Next, and earn money back.
For example, CashbackKings.co.uk would pay you £1.50 for a £50 weekly shop at Tesco.com, up to £18 if you switched your gas and electricity provider through uSwitch and as much as £85 if you were to take out an ISA with Legal & General.
Other cashback websites include quidco.com and topcashback.co.uk. However, bear in mind that most sites require you to pay a membership fee. In addition, making a saving on an item from a listed cashback store might be a false economy if another shop is selling the same item with a smaller price-tag.
Before you join a cashback website, read the small print carefully and also check the thresholds on items.
Another alternative is a cashback credit card, from Egg or Barclaycard for example. These tend to give you a certain amount of money back when you make a purchase over a set amount. However, remember you will be charged interest for spending on plastic unless you clear your balance each month on time.
Step 6: Cheap nights out
Enjoying an evening out with friends, family or your partner can end up costing a fortune.
When it comes to eating out, take advantage of vouchers and discounts offered by restaurants as these can significantly cut your bill. The internet is host to dozens of websites that allow you to search for restaurants in your local area, with many offering booking discounts.
However, remember that alcohol often isn’t included, and as wine tends to be one of the most expensive components of a meal out, enjoying a bottle of Merlot or Chablis could offset any savings.
Restaurants that allow you to bring-your-own might be a cheaper alternative, as long as the food is reasonably priced.
Watch out for restaurants' cunning tricks that encourage you to spend more. For example, don’t give in to pressure to order pre-dinner snacks or drinks if you don’t want to fork out for these, and ask for tap water for the table rather than a bottle of sparkling H2O.
Menus tend to be designed to highlight the most expensive meals, so compare the prices of different meals before you order. Many restaurants don’t include potatoes or vegetables with a meat course, like steak, and ordering these separately can push up the price you end up paying.
If a night out at the cinema is more to your fancy, then you’ll be well aware that watching the latest film release can be a pricey way to spend the evening. As well as the tickets, over inflated prices on popcorn and drinks push up the cost.
Compare prices at different cinemas, as smaller venues away from the centre of town might be cheaper. Also consider bringing your own snacks with you – although bear in mind that some cinemas don’t allow this.
You can also see films before they are released by signing up for free at seefilmfirst.com. You’ll be sent an email around a week before a special preview screening comes to a cinema near you – just enter the code you are sent on the website and you can print off up to two tickets to take down to the cinema. However, there are only limited places available in each area, so you’ll need to be quick. Read more ways to cut the cost of your film fix
For theatre and comedy shows, websites like Londontheatreboxoffice.net offer a wide selection of discounted tickets, while lastminute.com offers half price theatre tickets and ‘tickets for a tenner’.
It’s also worth remembering that weekend matinees will often be cheaper than evening performances, and many local theatres offer special deals to their members.
If you want to hit a club or bar later, then try and research venues with free entry. That way, you’ll just have to pay for drinks. Also, check out gumtree.com, metparties.com or craigslist.com to see if you could get paid by local clubs to bring a large group of friends to a venue.
Read more ways to cut the cost of entertainment