Those of you who follow me on Twitter will know that I’m taking part in a ‘no spend day’ challenge until the end of the month. So I’ve been eeking out the remnants lurking in my food cupboards and making them last until the 1st of July. For those of you who haven’t tried it, I highly recommend it as a way to get your creative juices flowing, reduce waste and keep more pounds in your pocket.
It got me thinking back to the days when I was trying to pay off my mortgage. I’d tinker with my spreadsheet and see how a few extra pounds here and there affected my mortgage term. I was amazed at the difference even the smallest overpayment made and how saving £1 a day could cut years off your mortgage. It was then I realised the true power of every pound I saved…
The power of the pound
I was curious how overpaying £1 a day in today’s climate would affect the term of a ‘standard’ mortgage. I did some quick calculations using the Mortgage Calculator and Mortgage Overpayment Calculator on the Money Saving Expert website.
For the sake of simplicity, I used the current UK averages for the the figures I entered, namely £130,000 of mortgage debt at a 3.5% interest rate over a 25 year term. I kept the figures the same in the both calculators, changing only one thing – a £365 overpayment (£1 a day).
Although I knew what was coming, it still amazed me to see that this one simple tweak could cut 1 year and 8 months off the mortgage term! That’s 1 year and 8 months of freedom you could have for saving £1 a day!
How to start saving £1 a day
There are many ways that you could start cutting your expenses and saving £1 a day. Some things that I have done are listed below. For reference, I’ve added their estimated savings next to them:
- Take your own coffee to work (£2 per day)
- Take your own packed lunch to work (£3 per day)
- Write a shopping list and plan your weekly meals (£10 a week)
- Freeze leftovers (£5 a week)
- Downgrade your shopping basket (£10 per week)
- Make your own cleaning products (£5 a month)
- Borrow books from the library (£10 a month)
- Change mobile provider / downgrade your package (£10 a month)
- Switch your internet provider or haggle (£10 a month)
- Have 1 less takeaway a month (£15 a month)
- Have a water meter fitted (£20 a month)
- Swap your satelite service for a streaming service (£20 a month)
- Switch your gas and electricity (£30 per month)
- Switch your car & home insurance on renwal (£40 a year)
- Turn your thermostat down by 1 degree (£75 a year)
How much can you save?
So now I’ve shared the different ways that I’ve saved money, it’s time to think about how you could save £1 a day. Maybe you want to try some of the things above or perhaps you have your own money saving ideas. The key is to take action.
Whatever you choose, remember to take things slowly rather than trying to make lots of changes at once. Pick one action that you’re going to take and do it well. Then pick another. Slowly you’ll accumulate lots of new money saving habits and you’ll be on your way to financial freedom.
So before you leave today, have a think about the one action you will take and write it in the comment box below. Then come back in a months time and let me know how you’re getting on. If you’re feeling shy, that’s ok, just write it down somewhere that you can see it. The most important thing is to take action.
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