“You’ve got to accumulate to speculate…”

By Michelle Roberts, Deputy Editor, Creating Wealth

A couple of weeks ago, I asked my Creating Wealth readers…

“What three things frustrate you most about your current situation?”

The answer that kept coming up over and over was a lack of money to start a new business or to invest.

It’s not surprising that this is a frustration…

Take the old saying “You have to speculate to accumulate”…

While it’s true — I think whoever wrote it forgot that you’ve got to have something to speculate with.

The saying really should say: “You’ve got to accumulate to speculate to accumulate more”.

Not nearly as snappy and easy to say — but a lot closer to the truth.

So, today I’m going to share with you some of best ways in which you can accumulate (free up) some money every month.

Money that you can then either use to pay off any debts you have or, if you don’t have any debts, use to speculate in various ways.

Now, I’ve told you one way of accumulating some extra money already: last week I advised you to contact your bank to see if you can get a better deal on your mortgage.

I hope you’ve already contacted your bank to see if you can save any money (if you have, let me know). I did and saved £72.50 each month for the next two years — money that I can use to invest or put towards setting up extra streams of income.

Here are some more great tips for freeing up even more of your income for investing…

Save money on your monthly bills

It’s not just your mortgage where you could potentially save. Put aside some time soon to give all your regular bills a good once over.

You could potentially save £100s, if not £1000s, each year.

Gas/electricity bills:

As with reviewing your mortgage deals, you should get in to the habit of regularly reviewing your energy tariffs. It could be that there is a better tariff available from your provider.

If you can make a saving, then switch tariffs. It really doesn’t take long at all, whether you do it online (if you have an online account) or over the phone with an advisor.

I changed my tariff earlier in the summer and saved £24 a month on my gas and electric direct debits.

You should also consider changing supplier — as it could be that the company you are with isn’t offering the best deal. After all, there are no prizes for loyalty in this game.

Use comparison sites like Money Supermarket, uSwitch and Go Compare to find the best deals.

(NOTE: Make sure you consider any “leaving fees” if you are currently on a fixed term tariff. The cost of leaving your current deal may wipe out some or all potential savings you could make by leaving).

According to this report published in February by the Department of Energy and Climate Change, 14 million UK households could save over £200 per year by switching providers. And, of these, a whopping 9.5 million can save over £300 per year.

Switching isn’t difficult to do and doesn’t take long at all (not when you think about how much you could save for doing so), so make the time to do the research today and to review your situation on a regular basis.

Water bills:

If you pay an annual set charge for your water, you may be able to significantly cut what you pay for it by installing a water meter.

That way, you’ll only be charged the water you actually use, not what the water company estimate you will use.

To find out if you could make a saving by having a water meter installed — check out this handy calculator here.

The meter is fitted for free and you have a year to try it out and change your mind.

Council tax:

Did you know that there is a chance your council tax bill could be completely wrong? And that your home is one of the 400,000 UK homes that has been lumped in to the wrong council tax band?

If it is wrong, then there is a chance you could be in for a big rebate — dating as far back as 1993. Kerching!

You can check you council tax band here. If you think your band may be wrong, then you can challenge it. More information can be found on doing that here.

You may be also eligible for savings on your council tax bill if…

a) You live alone — which will get you a 25% discount.

b) You are in full-time employment, or are self-employed, but have a really low income — which will get you a discount/rebate.

If either of the above applies to you — then contact your council.

Phones/broadband/TV/mobile bills:

Depending on your current provider and package — there is a chance you could save money by switching provider.

Companies like Sky, BT and TalkTalk regularly have deals on so it pays to keep checking whether you could switch to a better and cheaper deal.

And the good news is that it’s easy to switch mobile phone provider and keep your old mobile phone number.

Before switching — especially with mobile phones — you should think carefully about how much you use the service to get the deal that best suits your needs.

Insurance:

It pays to regularly check your insurance packages to see if you could get a better deal. You could save £100s across all of your cover — especially if your accounts are set up to auto-renew (at much higher prices) each year.

Make sure you know when all your insurance covers are due for renewal and shop around for a better deal.

Note: It pays to check with your provider if you can get a better deal with them before you use comparison sites, as some companies are now offering better deals for those who go direct.

** Remember that with all of your household bills you may find you can make even more savings by switching to pay by Direct Debit. If you do this, then a top tip is to set the DD dates for your bills to a few days after your wages get paid in. That way they are all dealt with straight away and you can see exactly how much you’ve lot left for the month.

Check out your tax/benefits

Make sure you check if you are getting all the benefits you are eligible for. After all, if they are there and available, you may as well use them.

You can find out what you are entitled to by using one of the two benefits calculators listed here..

There are also some lesser known tax loopholes that you can take advantage of to save some money. For example, did you know that there is a Marriage Allowance, which lets you transfer £1,100 of your allowance to your spouse if they earn more than you — reducing their tax by up to £220 each tax year? You can find the details of that here.

You should also check you are on the correct tax code — you can do that here.

Transfer your debts.

If you’re making large interest payments on your credit card debts, you can save money by transferring your existing card debt to a new card on a 0% balance transfer deal.

By doing this you can secure a set period of time where you don’t pay any interest on your debt, saving you £100s (depending on the size of your debt).

You can find deals using price comparison websites like uSwitch or Moneysupermarket. The best I can currently see is for 41 months 0% interest on transfers with just a 3.45% transfer fee.

Just make sure though that if you transfer to a new card that you pay off the debt or move to a new 0% deal before the 0% period ends — as after that the interest rate will soar.

If you have several debts — loan, overdraft and credit card — all with high rates of interest, it could be worth looking in to getting a consolidation loan.

By taking out one loan you could reduce the interest rate and save a fair amount of money.

For example:

You have a loan for £5k which has a 4.3% interest rate. Over 60 months you pay £92.76 per month. The total interest you pay will be £565.66 (on a 60 month loan).

And you also have a credit card with £5k debt on it and you pay £150 per month off. In the time it takes to pay off (3 years, 10 months) you’d accrue £1887 in interest.

That’s a total month payment of £242.76 and a total interest of £2452.66.

But, by taking out a 10k consolidation loan at 3.3% over 60 months you’d pay £181.02 per month and interest of just £861.39.

That’s a big saving of £61.74 a month and £1591.27 in overall interest.

4. Use cashback websites/cards

I’ve been personally using cashback websites (Quidco and TopCashback) for a couple of years — and I’ve saved about £50 per year.

It’s not much, but it could be more as, I admit, sometimes I do forget to check before I buy.

You can get cashback on hundreds of purchases — from travel and insurance to food, fashion and home appliances.

And these purchases don’t have to be made online. If you register your card with them, you can get cashback when you are out and about shopping or eating out.

With some cashback sites, you can even earn a bonus referral fee for getting others to sign up.

It may also be a good idea — depending on your situation — to switch to a cashback credit card. You could earn anywhere up to 3% cashback on purchases you make.

5. Sell unwanted stuff

Have a big clear out on regular basis and sell on all the stuff you no longer use.

The most obvious location to sell your unwanted stuff is eBay but there are also specific sites out there for selling old stuff.

For example Mazuma or Envirofone buy unwanted phones.

Music Magpie is a good site for selling books, games, CDs and DVDs.

Mighty oaks from little acorns grow

Those are just a handful of ideas for freeing up more of your income each and every month…

There are many more ways that you can make extra “investable” money on the side — easily and (in many cases) for free — in our 57 Wealth Hacks guide.

If you haven’t picked up a copy yet you can do so here.

Now, you may be thinking that all of the suggestions I’ve given you sounds like a lot of effort, for not that much reward.

But that’s not true. Doing everything I’ve suggested would probably only take a couple of hours and most of it can be done online — at any time of the day.

And yes, you may find that the savings you can make only amount to a few hundred pounds per year. But remember: every £1 you save on your outgoings is £1 you can invest and grow.

And you know what they say: “Mighty oaks from little acorns grow”. And with the power of compounding that can certainly happen with your finances.

You may also be thinking that most of what I’ve told you sounds like common-sense.

You may even be thinking that I’m not telling you anything new.

But, for a lot of people — there is a difference between knowing they can and should save money this way and actually getting round to do it.

The list I’ve given you yesterday and today is a reminder that you can make more money — often for doing nothing more than spending a few hours doing a bit of what I call “life admin”.

But as Glenn mentioned in his email to you on Tuesday — when discussing how disappointed with himself he was not carrying on with this profitable service.

“If you let it slip, like every time you let that daily piece of exercise slip or that diet you promised you’d stick to, you eventually forget about and other things crop up.”

In order to continually free up money — money that you can invest and grow in to a fairly large pot — you have to be committed.

So set aside a specific time in your diary every month — just a couple of hours to keep on top of it all. And see how much money you can free up each month.

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