One year ago Faith Archer embarked on a mission to boost her family’s finances, just by living sensibly. Now she reveals how she got on.
Ask and you shall receive: a couple of phone calls to a telecoms provider generated 118 in savings for Faith Archer and husband Josh, seen with their children George and Isabel.
On the first day of 2016 I resolved to do something extra each month to make the most of my family’s money. A year later we are nearly 9,000 better off thanks to a combination of reduced costs and additional earnings. Small tweaks – such as switching electricity provider and comparing insurance policies – can add up to big savings.
As a family, we already try to make every penny count – I even write a blog, Much More With Less, about leaving London, moving to the country and living on a reduced income. My husband Josh, 48, works in the charity sector as a fundraiser for St Elizabeth Hospice in Ipswich. I juggle bringing up our children – Isabel, nine, and George, seven – with working part time as a personal finance journalist. This means we live on a limited income but have emergency savings and money stashed away for retirement, a situation that will be familiar to many Money readers. We are also very lucky: thanks to rising property prices we do not have a mortgage on our house in Suffolk, which we bought with the proceeds of selling in London.
Just over a year ago, I overcame deep-seated caution and shifted my Isas from cash to shares. Over the course of 2016, the investment trusts in my Isa grew a chunky 14%, from just under 30,070 to almost 34,370, with dividends reinvested.
I have also written in the past about haggling over heating oil, which powers our hot water, central heating and elderly Aga. It becomes easier, however, if a supplier is giving you heating oil via C.O.D. delivery! However, there are other factors as well that come into play while choosing an oil vendor. One of the foremost ways would be a price comparison! By comparing quotes, we saved almost 150 on our oil deliveries last year. If you’re looking for an oil delivery supplier, look for firms similar to Bonded Oil (if interested, check https://www.bondedoil.com/).
Aside from the 4,450 earned on Isas and slashed from heating oil, we saved another 4,500 during our year of being sensible with money. Here’s how we did it.
Applied for a new cashback credit card
When our credit card bill arrived after Christmas, I realised the cashback rate had dwindled to 0.25%. After comparing other options online, I applied for a Nationwide Select card, which pays you back 0.5% of the money you spend and has no fee, no cap and zero commission on spending abroad. In 2016 we notched up 95 cashback on our credit card spending – double what we would have earned with the old card.
Set up regular saver accounts
Frustrated with the awful interest rates on our emergency savings, I opened two regular saver accounts paying 5% gross for a year, linked to our First Direct and Nationwide current accounts, and set up direct debits for the maximum contributions of 300 and 500 a month respectively.
When the accounts close after a year, we should get 97.50 interest from First Direct and 162.50 from the Nationwide Flexclusive Regular Saver.
Even better, the new personal savings allowance, introduced last April, means I will not pay a penny in tax on interest up to 1,000. Even higher-rate taxpayers can earn 500 interest tax-free.
Switched electricity provider
Saved 394, earned 16.16
Our recently replaced meter showed we were using more electricity than expected. A quick scan of the comparison websites revealed that we could save 394 a year by switching provider.
By clicking through from the website TopCashback to the Energy Helpline in order to make the switch to the new market entrant Extra Energy, I also earned 16.16 in cashback.
Saved money on broadband and home phone – just by asking nicely
Our broadband and landline bills with Plusnet had crept up to nearly 500 a year. I made two calls to customer services and the company agreed to halve our broadband charges for two years, from 9.99 to 4.99 a month. We shaved 9% off the cost of line rental by paying for a year upfront. We signed up to pay 3 a month for an allowance of calls to mobiles, which should reduce our outgoings by nearly 40 a year.
Sold broken washing machine on eBay
Our elderly Miele washing machine, which we inherited when we bought our house, finally broke down in May. Luckily, we’d brought the machine from our old home with us, so just got that plumbed in.
I was annoyed to discover that the council charges 38.50 to remove white goods, classing them as “bulky household waste”. Instead, I listed the Miele for parts or repair at 1p on eBay, on the basis that the buyers would collect – which they duly did.
Switched to a multi-car insurance policy
Saved 529, earned 65.65
Public transport is limited in Suffolk, so in June we bought a second car. The insurance for our elderly Volkswagen Golf estate was 305, so it was a shock when quotes for the smaller, newer, less powerful Polo came in at more than 1,000.
Instead, we insured both cars under an Admiral multi-car policy for just 520. I also earned 65.65 by clicking through from TopCashback to buy the policy, along with a 49 refund from our previous insurer for the unused premium.
Journalist Faith Archer has been making every penny count since leaving London
Found cheaper mobile phone handsets and tariffs
Last year I joined the 21st century by switching to a smartphone. But rather than sign up for an expensive contract with the latest handset, I bought an older model outright from the network giffgaff and continued paying separately for a 5- a-month Sim-only call package. The combination saved just under 43 a year, relative to a contract for a similar handset.
I also asked Virgin Mobile for a second fiver-a-month Sim card for my husband’s phone, which saved him 152 a year.
Paid into my pension and earned tax relief
Feeling flush after having been paid for a project, I sent a 2,700 cheque to my personal pension, knowing the taxman would add 25%, or 675. Basic-rate taxpayers can put up to 40,000 a year into a pension and still get tax relief. Higher-rate payers, on the 40% rate, qualify for the 25% top-up and can claim a further 25% of their contribution back through their tax return.
Researched cooker and connection prices
I bought a new range cooker after the summer holidays. By comparing prices online and asking a local firm, Stellisons, to price-match the best deal, I saved 500 compared with buying the same cooker from John Lewis or Currys. Stellisons quoted 94.99 to connect the cooker; I found an electrician who did it for 55.80.
Made use of current accounts that pay interest
In October, as savings rates tumbled, I opened another current account – this time with Tesco bank – to earn 2.96% gross on 2,000. Current accounts have become a haven for those seeking a return on their cash and pay up to 4.89% gross on limited amounts of money.
Thanks to four other current accounts – Nationwide FlexDirect, Club Lloyds, TSB Classic Plus and Santander 123 – we netted almost 830 in interest and cashback on household bills during 2016. Sadly, my rates on these four accounts have either fallen already or will do so soon.
Claimed leakage allowance on our water bill
I noticed that a couple of taps were dripping and two loos had leaking cisterns, which is worrying when you are on a water meter. Thankfully I found an introductory offer for HomeServe plumbing cover at 12 for the first year, with no excess to pay on claims. This seemed distinctly cheaper than a single call-out charge for a plumber.
Once it was all fixed, I could claim a “leakage allowance” from Anglian Water. I supplied two meter readings, a fortnight apart, to establish our usage before and after. I received a credit for 92.97.
Claimed loyalty points and cashback
Over the year I hoarded loyalty points and cashback to put towards the cost of Christmas. I waited for the Sainsbury’s Nectar Double Up promotion to buy 60 worth of Lego, DVDs and clothes. I also spent 20 of my Boots Advantage points on photo frames and Christmas cards, and claimed a 50 Amazon voucher from TopCashback to buy my daughter an animation software kit.
Overall, I benefited to the tune of 300 during 2016 from the loyalty schemes at Boots, Morrisons, Sainsbury’s and the Co-op. I earned a further 65 by shopping online via TopCashback and Quidco.
HERBS AND KERBS: MORE SAVINGS
Buying a railcard: 145 saved
A 30 Network Railcard gives me a third off train travel in southeast England during off-peak hours. Over 2016, the railcard cut the cost of tickets to London by 175.
Changing the car: 216 saved
Switching to a smaller, more efficient car in June has cut the cost of my husband’s commute. He used to pay 178 a month for petrol, but now that’s down to 142. That 20% drop was particularly good news in a year when pump prices for unleaded petrol rose 13%, according to the business department.
Planting herbs: 8 saved
Planting herbs in our garden means I no longer have to buy packets of mint, flat-leaf parsley, tarragon or sage from the supermarket.