Changing how much money you save and spend is not always about making simple cuts to your finances, it can also be to do with making changes to your lifestyle and the way you think.

Sometimes financial decisions that seem inconsequential to us can actually have more impact on our finances than we thought. Let’s explore some of these here.

Monthly payments

Making payments monthly compared to yearly can make us think about money in a different way. If you pay £45 a month on a mobile phone contract, that works out at £540 a year. But if you were to change that payment to £25 a month, that cuts the yearly amount down to £300 a year. With the £45 monthly payment you are spending £240 more per year.

As you can see, the saving is much bigger when compared over the course of a year. It is easy to overlook the yearly savings that can be made when paying monthly.

Don’t always buy cheap

When you are looking to save money it often seems like the best option is to buy cheaper items. The problem with this approach is that you will find that you buy cheap quality too. That just means that you will need to replace the item sooner, which is likely to end up costing you more.

There is a difference here between buying brand names just because of the badge and buying higher quality goods. A brand name that is really a vanity purchase will not always be better quality than a cheaper product.

A vacuum cleaner that costs £150 is likely to be better and last longer than one that costs £50 and doesn’t clean your home as well as you’d like. You might find yourself getting frustrated with the £50 cleaner, or it breaks and you buy the £150 one after a while. This means you have actually spent £200 overall.

Buy second hand

There are good ways to buy second hand items and there are bad ways. You need to know why someone is selling something that is apparently in good working order. If it is because they no longer need it and you are sure they are being honest with you, then you could have a good deal.

Items like TV’s are great to buy second hand because people love to upgrade to the latest model, even though their current TV is working fine. If you are serious about saving money and just want a working TV you will realise that you don’t need to buy the very latest model.

Always do your research when buying second hand though, sometimes you might find that new products are actually cheaper than they are being sold second hand. People often jump on sites like eBay looking for a bargain and they get carried away and don’t realise that they are paying the same or more for the same product as they would if it was new.

Where you live

A simple way to spend less is to move to a different, cheaper area as it can dramatically decrease your cost of living. If you really need to save money this is a drastic but effective way to do it.

You might live in a location that has premium prices because that is where you have always lived, but it might be expensive compared to another area.

Think how much it would affect you if you were to leave the area and live somewhere cheaper. Would it have a huge impact on your life? Would you still be able to see friends and family? Would you be able to get to work? Asking yourself these questions will help you make a decision.

Save money on the big things

Yes you can save 20p on a tin of baked beans in your weekly shopping, but it is when you are buying the bigger items that you are able to make significant savings. If you save 10% on a £500 television you are obviously saving more money than if you were to save 10% on a tin of baked beans. If you focus on making savings on the most expensive products you buy, you will find it easier to save more money.

We all base our spending decisions on certain beliefs and habits, but we can change these decisions if they aren’t helping us to reach our financial goals.

By doing this though, you shouldn’t avoid saving money on smaller items, small savings over time can add up to large savings and could be the difference between having some extra money at the end of the month.

Keep a money diary

This is really simple, all you need to do is to write down everything you spend, what you bought and how much it was for. When you look back at what you bought you will easily be able to identify the areas you are overspending.

Savings such as this are much easier in hindsight. You might realise that a certain purchase was unnecessary now, but it was possibly harder to see that at the time or you were caught up in the moment.

Many of us find it hard not to spend when we see temptations. It’s then easy to forget what you bought. With a money diary it will all be there for you to see and there will be no hiding place.

Creating a diary doesn’t have to be a difficult process that takes time. You can just use an ordinary diary or even the calendar in your mobile phone to write down your spending. There are also mobile apps that help you to keep track of your spending and allow you to set budgets.

Shop once a week

It is much easier to budget when you do your grocery shopping less frequently rather than every other day or whenever you are hungry.

Supermarkets thrive on what they call impulse purchases. This is where people buy things that they didn’t originally go into the shop for. If you do a weekly shop with a list you are much more likely to think about your shopping, plan it properly, and only buy what you visited the shop for.

At the same time, make sure your weekly shop is after you have eaten. You will be much more tempted to buy more when you are hungry, and often it will be food that you don’t really need.

Get your partner on board with money saving

Changing your lifestyle to save money is going to be very difficult if your partner is not on the same wavelength as you financially. If you are going to commit to saving money, having your partner committing to doing the same thing will help you hugely.

Imagine how hard it would be if you are saving the pennies but you can see your partner spending and not changing their habits. It would be incredibly frustrating and could even put a strain on a relationship.

Try to work together with your partner on this and save money together, after all two people saving hard will mean double the savings.

Review your Direct Debits

It is very easy to set up a Direct Debit and then just forget about it. If you are making lots of small payments each month it can add up to a lot of money coming out of your bank account regularly.

Set aside some time to look through your Direct Debits and cancel any that aren’t essential or that are luxuries. How strict you are depends on how much money you are looking to save.

Most banks allow you to manage your Direct Debits within their online banking service, or you call call them to cancel anything.

Give yourself a cash allowance

Instead of just using debit and credit cards, why not take a certain amount of cash out of the bank each week that is affordable for you. When you spend all the cash you aren’t allowed to take any more out.

This is a good method to help you keep track of how much you are actually spending because you can see it physically, and when it runs out, that’s it.

Electronic money can often not seem like real money to us and it is easier to spend when we can’t see it. It’s also easy to think we have more than we do. If you budget yourself with cash, you could find it easier to spend less.

Become less materialistic

When you want to buy something, think about why you want it, is it the latest piece of technology that other people have and that you also want, or is it essential to your life. If you find it’s not essential then would the money spent on that be better off saved?

There is often enjoyment in life in the simpler things that are free. Take time to appreciate a walk in nature, or a nice sunny day. It is easy to forget these things when we are bombarded by advertising messages throughout most of the day.

We often have so many possessions, some of which we don’t really need but we feel like we should have them. Partly because everyone else has one or we think it might come in useful one day. If we cut some of these unnecessary possessions out of our lives we will save money buying them and we might be happier.

If you have loans – pay them off

Keeping a loan for a long time and only paying the minimum amount back you need to each month is going to mean that you will pay much more back over the longer term.

When you do this you are essentially only paying the interest back and not the actual capital of the loan, the amount you originally borrowed is not being paid off. Your loan will last a very long time

Buy cheaper brands

Products from brand names cost a lot more than a supermarket’s own brand. Many of the products are exactly the same, in fact the only part that is different is the packaging. By changing from branded to non-branded there is the potential to save a lot of money and still have the same products.

Keep emergency savings

Try to save up enough money to cover about six months worth of your outgoings should something unexpected happen and you lose your income.

Six months is a good amount of time to enable you to find another source of income, and having the savings as cover will mean that you won’t have to struggle to pay your bills.

The Money Advice Service has an article about this which says you should keep a few months savings just in case.

Use comparison websites

Instead of sticking with all the same insurance and utilities providers you have always been with, there are websites which compare the cost of these services. Each time anything is due for renewal, run a check to find out if you can pay less money by moving to another company.

Existing customers often pay more than new customers because they haven’t tried to shop around and find a better deal.

Another trick that can work is to tell your company that you are cancelling their service, they will then often give you a better deal that the one you are currently on. They would rather keep a customer than lose one altogether. You can take advantage of this

Become an expert budgeter

Making yourself a budget and sticking to it every day is perhaps the biggest lifestyle change you can make when it comes to saving money. You don’t actually need to be an expert budgeter, the first step is to just make a budget that you think you can stick to every day.

The worst budgets are the ones that are unrealistic and set you up to fail because you have made it stretch you too much. If you need to save money it is very difficult to go from spending a lot to cutting down your expenses dramatically.

This article sets out some good ways that you can plan an effective budget.