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08.05.2017

8 Money Saving Tips That DON’T Work!

From old relatives to the latest money-saving websites, everyone’s got money savings tips that they’re happy to pass on to anyone who will listen – but can you spot the fact from the fiction? Are any of these tall tales actually costing you money? When it comes to managing finances the pennies and pounds really do count, so make sure you’re not wasting any on these red herrings:

  1. “An economy 7 electric package will save you a fortune!”

Economy 7 or ‘differential rate’ electricity tariffs were first introduced in the 1970s when night storage heaters and immersion water heaters became popular. A lot of energy companies don’t advertise their differential rate services now but there are millions of households still on the pricing plans. Sure, electric is cheaper through the night, but the day time rates can be much greater than an ordinary tariff – so be careful, they’re not for everyone.

If you’re not sure about your energy tariff give your supplier a call and ask the question. They are keen to keep their customers, so might even be able to talk with you about any tariffs that would suit you more.

  1. “Put the excess right up to keep your insurance costs down”

If you’ve shopped for insurance online you’ll find yourself at a point where you can choose the level of ‘voluntary excess’ you want to pay. This is the amount of money you pay toward any claim for your property, so if you bump your car and the repair will cost £600, a £500 excess means you foot the bulk of the bill.

Generally, a higher excess equals a lower premium as the insurance company won’t be paying out as much. This makes it tempting to choose a high excess. No one chooses to have an accident, but more than 4 million car claims alone are made each year. The important question to ask yourself here is “can I find the excess money in the event of an accident” – if the honest answer is no – or you’d be forced to turn to payday lenders, then the small saving on your premium could turn into a nasty large lump sum to find.

  1. “Turn the thermostat up high for a quick heat boost!”

Nope! Your heating system warms at the same rate whether you’ve turned the thermostat up by 1 degree or 20. Turning it up high means you’re more likely to forget about it, ending up with your heating bill turned up equally high.

  1. “It’s always cheaper to buy in bulk!”

This is an area where real life and money saving theory often collide. You’re standing in the supermarket looking at tomatoes – you can buy one pack for £1 or two packs for £1.50 – so great, that’s a saving of 50p. Now fast forward a week – your saved money quickly becomes wasted money when you’re throwing an unused pack of over-ripe tomatoes into the bin.

While environmental considerations do feature in the way they operate, supermarkets are ultimately businesses who want you to spend as much as possible in their stores. If you would be buying those additional products without the bulk offer then great – but if you’re buying purely because you like the look of the ‘deal’ – then think twice, you might be a week away from throwing money in the bin.

  1. “Big value family pack!”

This is the opposite to a bulk buy! There are occasions where packaging can be somewhat misleading – anyone could be forgiven for thinking that something claiming to be a ‘mega value multipack’ works out cheaper, but it’s just not always the case. There are many instances where ‘multipack’ pricing is shown to actually be greater than buying the same number of individual products.

The real tip doesn’t sound as exciting – try to look past the eye-catching signs and read the ‘unit pricing’ on the supermarket shelves, this means you can compare the actual product costs, either per unit or in smaller measurements, meaning you’re comparing like-for-like – and can decide which is the better deal for you.

  1. “Do you washing up by hand – it’s cheaper than running a dishwasher”

Assuming you’re using your dishwasher correctly then this is just not true. A recent university study indicated that if you’re running your dishwasher for a full load of dishes and on an economy setting then you can expect it to use around 50% less energy, 85% less water and less detergent than washing up by hand.

  1. “You get a better deal for cash!”

There’s an idea that a ‘cash-buyer’ is something companies desire, quick and clean transactions – hand over the money and walk away the product. This is often a misconception and can leave you vulnerable – in more than one way. Before anything else, it’s important to recognise that carrying large amount of cash can be dangerous and isn’t recommended.

Because it’s often perceived to attract a discount, people like to appear to be dealing in cash, even if they’re not. This often means arranging finance elsewhere prior to negotiating a purchase, thinking they’re in a position of power with ‘cash in the bank’. Actually, being honest with a salesperson is often a better route to take – companies do attract some incentive from the banks who provide their finance, so they might be able to offer you more favourable terms or a reduction on the price if you’re using their finance.

Also, thanks to the Consumer Credit Act, credit cards protect your purchases if you’re spending between £100 – £30,000 – meaning if there’s an issue with the product or supplier, it can often be resolved more quickly than if you bought with cash.

  1. “An electric heater is cheaper than putting the heating on”

If you’re looking to warm just one room it can be tempting to point a small electric heater in your direction and get toasty quickly. In reality, plug-in electric heaters are shown to be the most expensive forms of heating you can use to warm your home. It’s far better to use room thermostats to get the warmth you want out of your central heating.

Your money deserves the truth!

There is no end to the money saving tips on the internet – be careful though, while some are just ineffective, some will actually cost you money – you owe it to your bank balance to check the facts first.

If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.