A lifestyle based on frugal living and reducing household costs is highly advantageous, especially during the current credit crunch. It could mean that credit card debt can be reduced or even that the money saved can be invested in a tax-free cash ISA or stocks and shares ISA.
Reduce Household Costs by Switching from Sky TV to Freeview
Whilst paying for a TV license is compulsory, a great way to save money is cancelling that additional Sky TV subscription and opting for Freeview. Freeview currently has 48 TV and 24 radio channels available. This simple frugal living idea will reduce household costs by up to £600 per annum.
Cut Living Costs with the Rent-a-Room Scheme
By 2020, the percentage of men living alone over the age of 60 is expected to be about 30%. The government now offers home-owners the chance to deal with this cost of living increase.The rent-a-room scheme permits someone to make a tax-free income of up to £4,250 per annum.
Frugal Living and Property Size
How many couples continue to live in a 3 or 4 bedroom house after their children have left? A part of frugal living is recognising unnecessary expenses. A money saving tip is to sell-up and buy a smaller house. This will reduce utility bills, council tax ,and mean that the additional cash can generate a further source of income.
Use ‘Salary Sacrifice’ to Pay Less Taxation
A salary sacrifice scheme involves an employee foregoing some of their salary to provide a non-cash benefit. Examples include: pension contributions, childcare and the cycle-to-work scheme. Salary sacrifice means a lower monthly wage, but the benefit from lower taxation helps with frugal living.
Beat the Credit Crunch and Buy Cheap Designer Clothes
Designer clothing isn’t normally associated with frugal living. However, a great money saving tip is to purchase last seasons designer clothes from TK Maxx – TJ Maxx in the US – and Bicester Village at up to 70% discount. Designer clothes will last longer and can even be less expensive than generic brands.
Tax-Free Savings and Frugal Living
The government offers investors a number of tax breaks, including Individual Savings Accounts (ISA), National Savings products and personal pension plans. Tax-free savings help with frugal living, especially for higher-rate tax payers. Why pay tax when it isn’t always necessary to do so?
Frugal living is a great way to save money and cut living costs. Using the above money-saving tips can help to counteract cost of living increases. This leaves more money available to reduce credit card debt and save for retirement.