Saving tips for more money

One of the most common New Year’s resolutions, in addition to signing up for a gym membership or studying hard for your degree, is saving money. But how can you save money effectively without giving up too much? We have a few tips.

First, we divide expenses into two types: fixed costs and variable costs. There are different approaches to reducing these two types of expenses.Play

Reduce fixed costs 

Fixed costs are the costs that usually arise month after month or year after year and are, so to speak, fixed. This is because they are contractually agreed, for example, and are automatically collected or transferred on a regular basis. These include rent payments, electricity costs, cell phone contracts, subscriptions, memberships and more.

List all fixed costs

Sometimes it’s the small or infrequent fixed costs that are easy to lose track of. Some apps can automatically scan your bank statements for recurring costs and then list all the contracts you have. 

You may find one or two positions that you have been wanting to quit for a long time.

Cancel unnecessary contracts

Once you have an overview of which contracts exist and how much is debited and at what frequency, you should cancel unnecessary contracts immediately. This is something that is easy to put off, especially when it comes to small amounts.

If you don’t feel like writing a cancellation email, there are providers who will do it for you. 

Also cancel required contracts

The classic: You never go to the gym and the contract automatically renews for another year. It’s easy to miss the cancellation deadline.

That’s why it’s helpful to cancel a cell phone contract, gym contract or various subscriptions immediately after signing the contract. In this case, the contract will continue until the contract term has expired. After that, it will end automatically. Before the end of the contract term, you usually have the option of reversing the cancellation and continuing the contract if you still need it.

Especially with cell phone providers, you can assume that they will contact you before the contract expires. You can use this to find out about new conditions for continuing the contract.

Instead of canceling a contract as a precaution, you can of course set a notification in your calendar or use an app that reminds you in good time before the end of the cancellation period. We recommend both: cancel the contract as a precaution and set a notification so that you remember to take care of the canceled contract in good time.

Compare contracts

If you have already terminated the contract as a precautionary measure but would like to continue it after the end of the term, this puts you in the situation of having to deal with this contract: Should it be continued or is there a cheaper alternative in the meantime?

It can be worthwhile to look for cheaper alternatives, especially for cell phone contracts or electricity contracts. After a period of one or two years, a lot has changed on the market. Perhaps new competitors have emerged or electricity prices have changed overall.

Comparing insurance policies regularly can also be worthwhile. Firstly, your own life situation changes from time to time and an insurance policy may no longer cover your actual needs. Secondly, the market can of course also change: competition is particularly high in the area of ​​car insurance, so switching policies every year can definitely be worthwhile.

🚀EEG levy decreasesThe EEG levy will fall in 2022. The EEG levy is used to finance the expansion of renewable energies and is paid by every electricity customer. Because this levy is now falling in 2022, electricity prices will also fall and electricity providers will probably pass these savings on to their customers in very different ways. It is therefore particularly worthwhile to compare electricity prices. A particularly helpful tool for this is Wechselpilot. This compares electricity prices for you, takes care of all communication, termination, and the conclusion of a new contract if there is a cheaper tariff.

Reduce variable costs

Getting a grip on variable costs is a little more difficult than fixed costs. Lots of small expenses for a restaurant visit or a tasty snack can quickly add up to a large amount. That’s why it’s a good idea to set budgets for different expenses that you stick to. You can then try not to spend more than a certain amount per month on shopping or car sharing, for example.

How to budget expenses

Our household book

Take the time once a week to write down your expenses and see how much you spent on what. A helpful Excel tool for this is our household book . 

envelopes

If you love cash, you can put the money in different envelopes at the beginning of the month, each containing the amount that you can spend on a specific purpose.

This may sound a bit analog, but many people have a better sense of their spending when they pay in cash and have the money in their hand. It also saves you the hassle of having to write down the expenses.

Automatically with an app

In addition to the manual method, there are also numerous apps that you can use to track your finances. Some of them can even be linked directly to your account so that expenses are automatically assigned to a budget.

Saving hacks to save even more money

Rent more and buy less

Do you know this? You want to shoot a holiday video with a drone, but you don’t have a drone? You want to throw a party in the garden, but you don’t have tables, chairs or a sound system? You want to have a survival weekend and you don’t have any equipment?

With many of these products, people tend to buy them even though they rarely use them. In these cases, it can be financially worthwhile to rent such a product rather than buy it.

However, you should do the math carefully, because this money-saving hack can quickly become a money-eater. Especially if you sign up for subscriptions and then fall into a subscription trap.

Avoid consumption-promoting impulses

Numerous newsletters, Instagram pages and YouTube channels are constantly showing you some great new things that you absolutely want to have. It is unfortunately completely human and does happen that you give in every now and then and order a product that you don’t actually want. 

You can therefore save money by systematically turning off, unsubscribing and no longer subscribing to all media that promote consumption, such as Instagram channels, newsletters and much more. 

Avoid 0% financing

It is very tempting to buy a product using 0% financing. This means that instead of paying for the product outright, you take out a loan from the seller which you then pay off over 12 or 24 months. With 0% financing, there is actually no interest on the loan. 

But there is a catch. This type of financing encourages consumption. The hurdle to buying a product that you might not have been able to afford with a one-off payment is much lower.

Therefore, only buy things that you can afford with a one-time payment. If in doubt, you just have to save up for the product for a few months and then you can afford it later.

Set purchase deadlines 

If a great product catches your eye, wait a month before buying it. This way you can avoid making an impulse purchase in one mood that you might not have made in another mood. 

After a month, the temptation will either have worn off and you will have managed to avoid a pointless impulse purchase. Or you will still want the product: then you should treat yourself to it.

Write a shopping list

Even in the supermarket, tempting products smile at you from time to time. The previous tip of simply postponing the purchase for a month is not particularly practical here. But you can avoid impulse purchases by writing a shopping list before you go shopping. The shopping list will save your wallet, especially if you go shopping hungry.

Find energy guzzlers in the household

Old household appliances in particular can consume unnecessary amounts of electricity. You can identify these with an electricity meter that you place between the socket and the plug. It might be worth investing in a new appliance that will save you electricity in the long term.

By the way: Regularly defrosting the freezer saves electricity and prevents it from becoming an energy guzzler. This is the only way it can cool efficiently. More efficient LED lamps instead of old light bulbs also save electricity.

Car sharing and rental cars instead of owning your own car

We Germans love our cars and I don’t want to encourage anyone to do without them. However, especially if you live in a big city and don’t use your car much anyway, it can be financially worthwhile if you simply don’t own a car and instead use car sharing services or rent a car for the weekend every now and then. 

This also has the advantage that you don’t always have to worry about repairs to your car. You always have a new and (hopefully) clean car.

Of course, it is even cheaper to use public transport and cycle as much as possible.

Share streaming subscriptions

Subscriptions for Netflix, Spotify or other services are not terribly expensive, but most of the time you have several subscriptions. You can save money by sharing such subscriptions with friends or family. 

But be careful: You may be violating the general terms and conditions of some providers. So you should check this beforehand.

Make a tax return

In a few weeks or months it will be that time again: the first wage tax certificates will be distributed and you can start preparing your tax return. On average, you will receive around €1,000 back from the tax office for each tax return. This is particularly worthwhile. 

To make sure the whole thing isn’t too dry, we’ve tested a few tax software programs for you .

Pre-cook food at home instead of eating out

Eating lunch in the canteen or at a snack bar for €5-10 every working day may not seem like much, but it adds up to €100-200 per month. If you like to cook and just cook a little more in the evening, for example, so you have some for lunch, you can save a lot of money.

You can also save money by planning your purchases and meals carefully.

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