How can you reduce a lot of your expenses?

You may be clicking on this thinking this is one of those sh*tty clickbait sites that insist on telling you the "best" ways to save money. Well, you're wrong partially... this is quite the "sh*tty" site but I'm not insisting on telling things you already know but things that you don't know. The reason I know that is because I've done more digging than I normally do and I believe that I have found ways to save money only a select few know about! 

Be sure to read on and check out other posts when you are finished reading this one! All of them aim to help raise awareness for things that normally wouldn't be talked about!

What are common expenses a young adult may have and can reduce payments on?

• Food Expenses (Restaurant, Monthly/Weekly/Daily groceries shopping)
• Debt Obligations (Loans, Credit Card Debt, Mortgage)
• Travel Expenses (Car buying)
• Entertainment Expenses (Holiday)

Food Expenses

From my research, the average cost for groceries is £1,980 per year, per person. Meaning the average weekly cost for groceries per week per person is £38. Also, we spend £668 on restaurants/eating out of the house per year per person, therefore meaning that weekly we spend on average £13 per week per person. The way we can reduce this is first by reducing how often we go out to eat! It may seem self-explanatory but it's the basics that really lay a grounding foundation for a financially independent future. 

The second option, you could look into restaurant happy hours; These are hours where the restaurant is still open but gets fewer customers so in order for them to obtain a constant flow of customers they reduce their prices at certain times. These time are usually late at night, early in the morning and out with break and lunchtimes, these time are subject to the restaurant so if you are interested you will need to check in with your local restaurant!

Lastly, the way I would recommend is by looking into getting your hands on coupons, as they offer discounts to buy certain items. From my research, I found that 3 (the phone company) offer a service called 'Wuntu' which gives 3 customers discounts to restaurants like Bella Italia. There is also the alternative of getting a Tesco Clubcard and every month always using up the coupons that they send. You can also use loyalty cards to achieve the same things, save up points by scanning on the loyalty card every time you shop in that place and then use the points to pay for things like vacations or your next shopping trip.

Debt Obligations

The first thing I am going to say is that, from the help of YouTuber Graham Stephan, I was able to give you tips on ways to reduce your expenses. He was the best source for this part of the article. First, never go into overdraft! It has really high-interest rates which are hard to pay back and could lead you spiralling headfirst in debt that you may find difficult to repay.

House Hacking
House hacking is when you buy a multi-family property (duplex, triplex, Guest Homes). You can also convert a single unit house into multiple units. You then live in one of the apartments and then rent off the over spaces to cover the costs of your expenses. To do this, it takes a lot of time and patience because you need to wait for the right deal to come around and the right time to get a mortgage. (As of writing this article 30/01/20, I believe it's the wrong time to take out a mortgage as bank interest rates are high due to coronavirus outbreak and Brexit).

Rent Hacking
Rent hacking is when you rent out a family property and sublet the unused rooms to other tenants. The cons to this are that you cannot renovate the house/apartment due to you not owning it, you need to find a landlord willing to let you sublet the unused rooms out. Pros are that it is cheaper to start because there is no required deposit.

Mortgage Hacking
Mortgage hacking is when you try to obtain lower interest rates from banks by using interest rates from one bank to lower another. You do this consistently until you get the lowest interest rate possible. All this is obviously done also when interest rates are low so you can get an even better deal. Another thing to take into account also has a fixed interest rate instead of a variable interest rate, as the variable interest rate fluctuates with the market meaning that you could be paying a lot more than originally intended. I was recommended from an investment banker that if you refinance your house when interest rates are low, you could also be looking at better interest rates.

Travel Expenses

A car that costs $30,000 brand new takes about 3 years to decrease by 50%/ thereafter it'll take a further 5 years to decrease by an extra 25% ($7,500). Therefore if you want to decrease your travel expenses, first look into buying an electric car as paying for electricity is much cheaper than fuel as of Jan 2020 and look into buying a used car between the ages of 3-4 years and drive the car for 4-5 years, then you can sell the car with a loss of 25%. If you go older than the 4-year range you risk running into reliability problems with the car if you go younger than 3 years you risk the problem of the car price depreciating so rapidly that you lose a lot of money. BUT, if you want you can pay for an older car and have the depreciation of the car be so insignificant that you sell it for pretty much the same price you bought it for.

Entertainment Expenses

From what I've found the best way to save money on entertainment expenses is by using credit card benefits. Many credit cards offer a signup bonus or offer some sort of reward scheme. Here are a few examples:

We can use the money from these to get free money. These are just a few, with some other credit cards/ current accounts, you can get a points system and you can use that point system to redeem rewards. Another way you can reduce entertainment expenses is also by looking for discount cards in your local area, for example in Scotland you can get a Young Scot Card for 11-25-year-olds. 

*DISCLAIMER: if you fail to make repayments on these credit cards you could see high-interest rates. Also don't look to obtain a credit card if you are looking to get a mortgage or loan in the near future, give time for your credit score to recover.

With all that being said, thank you for reading today's post! Come back next week for the next post! But, in the meantime, you can read another post in business here. Or you can read my newest post on Why Rolex Marketing is so good! Lastly, you can support me by clicking the ko-fi button and donating to the cause. All money is used to go back into this business and the work that I do!