Money saving for families – 27 ideas you can implement now
Rising inflation and stagnant salaries have clobbered families’ nest eggs, so now is a good time as ever to think about investing in your child and focus on money-saving ideas for the family. In times of crises, money saving for families includes ensuring you have enough money to fall back on, like an emergency fund, in case you can’t work or the situation changes with your job role.
Budgeting ideas for families can help offer stability and if you’re doing it as a family, you can teach kids how to save money better too. If you look hard enough, there are tons of different ways to save household money. Here are some money saving tips for large families too, which you can implement right now.
1. Have piggy banks around the house
For very young aspiring savers, a piggy bank is the perfect starting point. You can find a piggy bank that’s colourful and based on one of their favourite cartoon or film characters.
This is a great time to begin their understanding of pocket money and how saving money works. They’ll enjoy receiving their weekly money and deciding whether to put it in their bank or spend it. The amount the kids receive doesn’t have to be much at all. Just getting them into the habit of saving is the first stepping stone.
2. Money saving for families – eliminate debts
You must learn how to save money while raising a family, so when you build up an emergency fund, you’re not burning it all away on debt and unnecessary family expenses. It is essential, therefore, before you save, to pay off any outstanding debts first, especially secured debts.
Debts like rent, council tax, mortgage and household bills like gas, electricity and water, need to be paid off first before unsecured debts like mobile phone and car insurance. There’s no point in having all these wonderful savings plan ideas when you’re constantly in the red. You might have credit cards that were maxed out and are now being paid off, or you might have student loans you need to refinance or consolidate. Now is the time to look at those debts and work to get rid of them.
For old student loans and other payments, consider refinancing, which essentially means you take out a new loan with an affordable repayment term and rate. Consolidation is ideal for people who have multiple debts and need to lump them all into one account. Martin Lewis has some great information on consolidating debt on his website, moneysavingexpert.com, as well as other money-saving ideas for the home.
3. Save for an emergency
Accidents are just a part of life, and there will always be unexpected costs that arise for which we may not have previously budgeted. One of the best budgeting tips for families is to make sure you have an emergency fund in place as this will give you the peace of mind you need to pay emergency expenses immediately.
The best way to save money is in a bank, and if you have a low credit rating, there are tons of basic savings accounts which offer minimal deposit when opening. When you’re looking at a savings account, check the rate of interest the bank will pay you when you save money. My HSBC bank offers 0.1% which is low, but it builds up.
4. Money saving tips for families online – app-based banking
We live in a digital age, which means regular bank visits and paper-based savings books are almost obsolete and a new wave of only online savings accounts has come in. I use a few myself which are great because I think they are one of the easiest methods of saving money. They automate saving by rounding up purchases and depositing the leftovers into respective savings pots. My favourites (I have these) are:
Beanstalk
Beanstalk* is a simple app that makes saving for children (and yourself) easy. The app is packed with tools; including money back on purchases and rounding up your change.
I opened my children’s Beanstalk Stocks & Shares Junior ISA and ISA for myself in minutes. There are no regular contributions I had to commit to, and you can round up your purchases, too.
Monzo
Apart from my main HSBC account, I have two bank accounts with Monzo, a personal account and a business account. Monzo is great because you get real-time notifications on how much you’re spending and saving. You can also create ‘pots’ where you can round up a purchase to the nearest pound and deposit the difference into a pot.
There are also no international fees and you can take cash out for free in the UK up to £200 within 30 days. You pay 3% if you go over that amount. Everything is purely online, so there are no branches that you can visit, but you can deposit cash anywhere with a PayPoint for a £1 fee and via cheque in the post.
I have a joint savings account with my husband where we regularly contribute towards the house. It’s easy to set up payments between each other too or split the bills if required.
I also have a free business account, but if you want to upgrade to business plus you would need to pay a monthly fee. Head to Monzo for more information on the different types of accounts you can open.
Plum
Plum is another savings account which works via its own app or via Facebook messenger. It works out how much you can save and moves that amount automatically to a savings account. You can save up to £5,000 per day via Plum, but you won’t get any interest paid on your money saved like a normal bank account.
Plum can also help you invest your money into a variety of funds, but like any investment plan, be mindful that your money is at risk. You could end up getting less than what you put in, depending on the stock market. However, you may also stand to gain more on your investment. So, it’s important to shop around and Plum can help you understand how to do that with great resources on their app.
There are also tons of ways to win money, like fun competitions and the messenger bot is pretty good at picking up what you want. Some comments make me laugh as they’re quite witty.
If you apply via the link below, you will get a £5 bonus added to your account within 30 days of Plum making your first automatic save.
Moneybox
Moneybox is another savings tool which offers several options for you to save by rounding up your purchases to the nearest pound and depositing the difference into one of your savings/investment accounts. For example, if you buy a coffee for £2.37, it will put away 63p into one of your accounts.
I have several live investments via Moneybox too which are taken from my account once a week via direct debit and invested a few days later. There are several accounts to choose from, either a general account or a stocks and shares ISA. It’s a great way to get started with investing if you’re like me and you’re a beginner. The app charges £1/month after the first three months, plus 0.45% a year of whatever you invest in.
It’s essential to have some savings plan ideas for the kids as well for when they start university, which can get very expensive thanks to high tuition rates and accommodation costs. It may seem out of reach now if you’re not earning in the top 1%, but if you start now, you should be able to offset much of this cost.
It’s never too early to save for university so open a bank account for your child now. If you’re in the US, BB&T bank accounts can help to separate your finances with your child’s college savings. If you’re in the UK, we use Beanstalk* to save for our four children via Junior ISAs and Child Trust Funds. You can find more information on these in my article on Beanstalk here*
You would also need to think about saving for childcare when that comes along once you return to work. Find out how much you will spend roughly on childcare each week so you can plan this. Perhaps it’s worth looking into adjusting your work or career path to make it more flexible for you to shuffle childcare with work, or lessen the need to get full-time care.
5. Money savings tips for families – get the entire family involved
Unfortunately, it’s almost impossible for you to be on a family budget if everyone isn’t on the same page. For example, you might avoid overspending all week long, but your partner is eating out a lot for lunch at work or ordering items online when they’re home. Likewise, your kids might ask for money constantly, or they might use your credit card to buy game cards or subscription services.
The key here is to get the entire family involved in coming up with frugal living family budget ideas, so kids learn how to save money effectively. Come up with some family money saving tips around the house, like making dinner and dessert from scratch or creating your entertainment in the evenings.
6. Ways for families to save money – find out exactly what you’re entitled to
Working out which family benefits you’re entitled to can become quite confusing, especially with the recent changes to child benefit and conflicting news articles. Visit the direct.gov website to find out what you are entitled to, for example, maternity pay, child tax credits, and child benefit.
Also, take advantage of the £230 marriage perk if you earn less than £11,500 a year. You may be entitled to Marriage Allowance to boost your family’s income, which allows one partner to transfer up to £1,150 of their personal allowance to their partner. This helps to reduce the tax bill by up to £230 during the tax year.
Although these can be difficult waters to navigate, once you have registered for the various benefits and credits that might apply, it is relatively easy to keep on top of them.
7. Budget ideas for families – look for free money opportunities
Look for opportunities to get grants and tax-breaks. Are you able to apply for a mortgage-holiday or rent-holiday? Are you eligible to receive grants for your business? Do you have a lost pension or bank account which you can track? Moneywise has a great article on 40 ways to get free money here.
Also, get into the habit of calling your utility/internet providers etc. and asking them what deals or discounts they can offer, as a gesture of goodwill for your continued loyal custom to their company. Some companies are more obliging than others, but generally, you can make approximately £100 a year by just asking!
8. You can invest in pretty much anything
From wine to Golden Eagle Coins, there are small investment opportunities anywhere you look, provided you can grow your capital. Here are some examples:
Real Estate
Buying a property is a great long-term investment option, as it can generate continuous passive income if the value increases. You can even use real estate to build your overall wealth and portfolio. However, you need to make sure you are ready to invest in real estate because you have to put a significant amount of money down, i.e. the deposit to invest, regardless of whether you buy a park home or a mansion.
There will be ongoing maintenance costs too, and you need to make sure everything is legal before you sign on the dotted line. A homeowner’s association attorney can help with the legalities before you buy a property.
Funds
A fund is another way of buying shares, but you buy a slice of the company directly. Each fund comprises ‘units’, and the cost of these units varies daily. So, if you wanted to invest £1,000 into a fund and each fund cost £1, then you can buy 1,000 units. Then, if each unit goes up in value to £2, your investment is worth £2,000.
Funds can invest in almost anything, from gold to even debt, according to their theme (i.e. geography, industry and types of investments). Which you decide to choose is up to you and your risk appetite.
Investing in an actively managed fund provides the chance of growing money faster. There is, of course, the risk of getting less money back than what you put in. However, experience in the stock market has shown that this is a small risk.
Look for advice on investing and find a suitable provider that can manage your portfolio for you in the best possible way. It might be an idea to convert your stocks and shares into cash right before your child’s 18th birthday, to minimise the risk of a stock market crash.
Bonds
Bonds are investment products created by governments and companies to raise money to pay for various projects like transport, a new factory or capital equipment. When you buy a bond, you are essentially lending money to fund these types of activities, and in return, you will receive a promise that you’ll get your money back, plus interest.
Bonds can be appealing as they provide an easy route to investing and are typically considered as low-risk. When you buy a bond, you can receive interest payments which are also known as yields.
They can also be fixed, floating rate or inflation-linked. However, it is important to note that bonds don’t guarantee payments, since there is a risk that companies and governments can default and you can end up receiving less than your initial investment.
With shares, there are no agreed interest payments and shareholders may receive a dividend. But, again, this isn’t guaranteed and it mostly depends on the company’s financial circumstances.
Saving for retirement – personal pensions
As well as saving for short-term goals, you need to think about your pension and saving for retirement (a long-term goal, so you don’t plan to draw from your investment until the distant future).
My husband has worked full-time since leaving university. Thus, he is regularly contributing towards his state pension. I am, however, worried about my basic pension entitlement as there are gaps in my National Insurance contributions from not working during my maternity period and subsequently working part-time at home while being a full-time mum.
However, I intend to make up the shortfall with my personal pension investment. Look into providers that offer personal pensions where you can pay as much as you want when you want. If you are a basic rate taxpayer, the government adds 25% of any amounts you put in, up to £40,000 per year, or the value of your annual salary, whichever figure is lower.
If you pay a higher rate of tax, then you may claim even more via your tax return form. Your initial investment can be as little as £5,000 where you can then make further contributions in regular instalments or ad hoc lump sums. You cannot withdraw any money from your pension until you are 55.
P.S – www.nidirect.gov.uk provides much more in-depth advice on pensions and includes a State Pension Age calculator to give you an idea of your own personal pension status.
Having a child saving plan with children’s savings accounts
Saving any sort of disposable income is difficult, especially in the UK. But, a good way to start would be to put aside 10% of your earnings every month. You can keep the rest of your salary in your account for daily expenses, etc. If you’re in debt or are struggling with your emergency fund, consider taking out a basic bank account which doesn’t require a credit check.
For your child savings plan, open a savings account for your child and put away small amounts into your children’s savings accounts now, which can lead up to large amounts later. A contribution of £10 a month at a basic interest of 3% could give your child nearly £3,000 by the time they are 18.
Saving £300 a month could produce a whopping £85,800. But, for longer-term investments, 18 yearly payments of £2,800 into a Self-Invested Personal Pension could make your children millionaires by the time they’re 65!
Stocks and shares
If you want your savings vehicle to be tax-efficient first and easily accessible second, then Junior ISAs are tax free and your child can’t draw the money until they are 18.
Junior ISAs and Child Trust Funds are accounts of the cash variety, i.e. you save 100% of your child’s annual allowance in cash. But, as interest rates are so low at the moment, this may not be the best decision.
Opting for an investment ISA like a Stocks and Shares ISA means you can earn a substantial return on your capital over a long-term period. For adults, you get a £20,000 allowance, and some providers will offer a no platform fee for 1 year. You can use all of this allowance for cash investments, or you can split it between a Stocks and Shares ISA, a Cash ISA (typically a savings account which you never pay tax on), Lifetime ISAs and innovative finance ISAs. As a rule of thumb, invest for at least five years to allow time to smooth out bumps in the market where your investment earnings may dip.
The best way to save money for kids is investing your money into an ISA where you can earn interest over time. You can invest your money into a Junior Stocks and Shares ISA, where contributions are made on behalf of your child to buy various types of investments, and your child doesn’t pay tax on any capital growth, interest or dividends they receive either. Other savings are liable to capital gains tax if the investments have gone up.
Although riskier than a Junior Cash ISA, as the value of a Junior Stocks and Shares ISA can fluctuate, this is a great option if you’re looking to invest over the long-term. Junior Stocks and Shares ISAs can offer more potential for growth, whereas with a Junior Cash ISA, inflation could eat at any interest your child could make.
If you already have a Junior Cash ISA for your child, you can still open a Junior Stocks and Shares ISA, as your child can have both. You just need to make sure that the combined amount you pay into both Junior ISAs does not exceed the annual limit, which is £4,368 a year.
9. Avoid using credit cards
You should only use credit cards in an emergency. If you’re using your line of credit to pay for new furniture, a boat or a luxury vacation, you’re doing your future financial well-being a serious disservice.
While it might not be a smart idea to close out these accounts, since doing this will affect your credit score, you should lock them away so they cannot be used and you won’t be tempted to rack up more debt with them. If there is an emergency, like a failed appliance or a broken-down vehicle, don’t hesitate to use your line of credit. Just make sure that it’s paid off as quickly as possible.
10. Family budgeting tips – Spend more time at home
When you’re out and about, you’re more likely to spend money. At home, you won’t have this problem (unless you’re ordering online deliveries all the time!), as you are less likely to spend on frivolous expenditures or activities. There are plenty of things you can do right in your backyard, and many of these can be educational.
Some things to try include bug catching, playing yard games, gardening or simply playing ball. Try to find ways to get kids off the screens by doing an indoor activity that gets everyone involved. The great thing about being at home with your family is that you get to spend time with each other when normally you would be running around in different directions. It’s a lot easier to save money together when you are together.
11. Make food from scratch and keep the ingredients low
Avoid pre-packaged food as they are much more expensive. It’s a lot cheaper to make meals from scratch and you need not go overboard on the ingredients. For example, make a simple Bolognese sauce with mince, onion, celery and chopped tomatoes, which saves you on around a £2–£3 jar of readymade Bolognese sauce.
Also consider making your own pasta instead of buying shop-bought, and limiting your ingredients to five or less, which can save you money per meal too.
If you have a large family, it may even be worth subscribing to a food delivery service like HelloFresh which provides the ingredients for you, so you don’t overspend in the shop – plus , every recipe I’ve tried has been ridiculously tasty!
12. Update your will and get life insurance
If you have a growing family, one thing that you cannot forget to do is update your will. You need to have an updated will in place that will outline how your finances and family are to be taken care of should something happen.
Although we don’t like to think about this sort of thing, you will want to make sure you are prepared. This won’t cost you much to do and it will give you the peace of mind that you need to protect your family financially after you are gone. Life insurance, if you are young and in good health, won’t cost you much at all, but if you can, I suggest you get life insurance sorted before the demands of a new baby take over.
13. Make sure you’re not taking out insurance where you don’t need it
There is such a thing as being over-insured. You can’t always insure against every risk, so calculate how much risk you’re willing to take. Life insurance is important, but do you need your premium health insurance if you’re fit and healthy and the NHS will suffice?
14. Swap supermarkets, and shop in pound shops and eBay!
It is time to step out of the mainstream mindset and move to cheaper stores like Aldi or Lidl. You may have to pack your shopping extremely quickly when the checkout assistant scans through your items at record speed. But, you save approximately £15-20 a week, compared to previous shopping experiences. That’s a huge £1000, or near enough, per year. eBay is also a fantastic place to get really cheap deals on pre-loved items for the family.
One of the best ways to save money on food shopping is to head online to do your supermarket shop. By shopping online, you can see the sum of your purchases in front of you and you’ll be less reluctant to add bits and bobs you don’t really need to your basket, which can often result in a nasty surprise at the tills.
By shopping online, you’ll stay away from those unnecessary buys and offers that lure you in. And if you shop with a comparison site, you can make even more savings because by offering you the cheapest possible price for each item and you can take the time to compare the different prices of products before adding them to your basket. Some great sites I found are Pricespy and PriceRunner which I use regularly, as well as Idealo and Kelkoo too. Shopping online is a great way to save money on buying clothes for the family too.
15. Sell your unused items too!
Instead of throwing items away, sell them! You could stand to make a lot of money on items that you don’t even use. eBay is probably the easiest way to sell your items, but you could also hold a garage sale or use the vast Facebook community where you’ll generally be able to sell things quite quickly.
A friend of mine gave me a great tip the other day, which was to sell gift cards you’ll never use. I had never thought to do that before as gift cards are generally given as presents. But, if you’re not going to use them, sell them to someone who will. So, go on a hunt around your home and create a collection of items you can sell to make more money.
16. Give the gift of time – and personalised gifts!
Birthdays, Christmas and other seasonal celebrations can get pretty expensive every year, especially if you’re like me and have a brother, sister, son and dad who are all born during the same week as Christmas! You can offer the gift of time if you haven’t seen that person for a while or if you’d still prefer to provide a gift, consider making something for them. Personalised gifts are a fantastic way to give someone something that no one else has. It shows that you’ve put your effort into the gift rather than buying them something generic.
17. Get cashback
Cashback sites will ensure you receive money back on purchases you were going to make anyway. Google ‘cashback sites’ and find the right site for you – you could be missing tons of savings by not purchasing via one of these sites.
18. Do surveys and take part in reward programs.
There is a myriad of ways to make money while you’re at home. Some easy ways are to fill out surveys in return for cash payments. It may not be lots of money, but some sites will pay up to £5 per survey, so the pot could add up. Reward programs are self-explanatory where they offer rewards for your purchases. Some credit cards offer this as well as some major stores. I have around £30 on my Boots card, which I’m accumulating to buy something I really need. That’s £30 of free money just by buying items from Boots!
19. Look for offers and special deals
You could take advantage of offers and special deals by looking for special offers and discount deals before you buy. Some brands recognise the value of making something cost-effective while providing a service for several members of the family at the same time. Sometimes, alongside the regular outstanding bills, food can be the next highest expenditure, as everyone has to eat.
Online grocery shopping is big business in the UK and all the major UK supermarkets have tons of great deals to entice customers in. If you’re a brick and mortar person, look out for deals at the end of each aisle or head to the shops late in the day when everything is reduced according to freshness and expiration date. Of course, tie that in with meal planning and you’ve effectively saved a huge portion of your finances every week.
Vouchers, coupons and discount codes can really make a difference when saving money on your shopping, so it’s important to take the time to look online for fresh codes or coupons in magazines or newspapers before you set off on your shop. Any savings you make will add up over time, whether it’s a few pennies on the petrol bill or a £5 voucher off your next big shop.
Get in the habit of keeping an eye out for special offers and deals too and bulk buy wherever possible, to make savings. Also, there are some great apps now which will automate this process, like Honey*, which I’ve added as a Chrome extension when searching via Google. Honey* will automatically scan the site and provide you with coupon codes which it will try on your behalf. It will then offer you the biggest saving on the item(s) you’re purchasing. I’ve saved so much money using Honey*. There is another app called Cently which does the same thing.
Also look for better mobile phone deals or consider going sim only and buying the phone outright. If your monthly contract is up, it may be worth keeping the phone and transferring to sim only that way. You could save hundreds every year from staying away from the overpriced phone deals that are in the market at the moment!
20. Reduce your leisure time or find deals
Entertainment eats into the family budget; from transport to expensive tickets. However, there are ways around this, which also applies to spare time at home, and overseas holidays. There are fantastic deals to be found for families, including free child places to destinations all over the world, meaning you can create lasting memories for less. Some attractions offer family discounts, and some may even allow grown-ups in for free.
Check on the side of the kids’ Cornflakes box before recycling as sometimes cereal packets feature great deals on days out for the family.
21. Remove the services you don’t use
Do you need Sky World? Are you paying premium prices for your gym membership but not using the gym? Remove these services because they are burning a hole in your pocket and you’re not gaining anything from them. You may think you’re not saving much, but over the years, cancelling unused services can save you hundreds, maybe even thousands!
22. Get personal with your expenses
Do you know what you’re paying for? Do you actually know where your money is going? Do you really need to buy new clothes? Using personal finance software can help you track where you are spending money, which will make it easier to see where you can potentially save.
Set goals on saving and caps on your spending, so you don’t overspend every month. If you’re in debt, then it’s a great way to track how much you have left to pay off and it can provide extra motivation to get back into the green too.
23. Use an affordable courier
parcels,If you spend a lot of money on posting parcels to family and friends, using an affordable courier like TNT can be really useful. As a reliable and trusted courier with a great reputation, you can send everything from fragile items to bulk parcels of old baby clothes and heavy parcels both domestically and internationally.
24. Think about your mode of transport
Can you walk instead of taking the car? Can you drive instead of flying? When we took a road trip to Switzerland it took us around 15 hours each way to drive. But we saved so much money and we got to travel with as many bags as we wanted and packed our own food. So we saved on luggage costs, and expensive airline food too!
25. Buy a timeshare
Holidays are precious ways to build great memories with the family, but they can also be expensive ways to have fun. There are, however, loopholes in enjoying a regular holiday once or twice a year without breaking the bank every time.
Timeshares are essentially holiday time where you can share ownership with other holidaymakers in a resort or holiday accommodation. When you buy a timeshare you purchase the use of that time in the accommodation, along with other owners, which means you can vacation in more luxurious accommodation for a fraction of the cost. Think of it as owning a holiday home, but only paying for your time when you actually occupy it on holiday.
If you no longer use your timeshares, then ensure you do your research via a reputable timeshare cancellation company to avoid any potential scamming when cancelling your timeshares.
26. Accept help when offered
If your mum is offering to make dinner for the family or a friend is offering to give you their car seat for free, consider accepting it. You could cut cost in so many areas where you would normally spend a lot of money. Plus, you’ll be able to offer the same when you’ve outgrown the item or when you’re in a better position to help.
I never knew about the wonderful world of recycling when I became a parent, but it’s a wonderful unwritten concept. You are given free stuff like baby clothes and items from a friend or relative which you then pass on to your friend or relative when they have a baby. Everyone is happy.
27. Take care of your health
By taking care of yourself, you will spend less on medical costs later, so it’s important to prevent health conditions which can be related to diet obesity, smoking and drinking alcohol excessively. Also, the healthier you are, the more productive you’ll be, which means the more you will make in your job or business.
Although the above money-saving ideas for the home won’t make you a millionaire tomorrow, they should help you make considerable savings, especially over a longer period. So if you stick to it, you will soon see the pounds adding up. You never know, you might treat yourself to a little something special in a few months, as a reward for being such a savvy parent!
If you have any more tips on how to saving money, please share your best tips in the comments below.
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