How To Overhaul Your Finances

On February 16, 2025 By newsroom Topic: Saving And Investing Money

A full money makeover can save you thousands by analyzing and optimizing your financial decisions. Whether it's cutting household bills, reducing debt costs, or trimming unnecessary expenses, this guide walks you through actionable steps to achieve substantial savings.

Will It Really Make a Difference?

A full-day money makeover can save you £2,500+ annually—equivalent to earning nearly £4,800 pre-tax for many people.
Though it takes time (up to 10 hours), the long-term payoff makes it one of the best financial investments.

Step 1: Do You Spend More Than You Earn?

How to Find Out

Debt Warning Signs
If you don’t know where your debt is from, it’s likely due to overspending.
Use a Budget Planner
Accurately assess your income vs. expenditure.
Many people underestimate yearly costs like holidays, car repairs, and birthdays.

Step 2: Pain-Free Savings

Save money without changing your lifestyle by optimizing bills, debts, and personal expenses.

Cut Household Bills

| Action | Typical Saving |
|--------------------------------|----------------------------|
| Cheaper Food Shopping | £1,000s/year |
| Check Council Tax Bands | £100–£400/year + backdated payouts |
| Cheaper Broadband & Phone | £100s/year |
| Cut Childcare Costs | Up to £2,000/year per child |
| Cancel Unused Subscriptions| Up to £200/year |
| Boiler Cover | £100+/year |

Cut Debt Costs

| Action | Typical Saving |
|---------------------------------------|---------------------------------|
| Balance Transfers for Credit Cards| £150+/year per £1,000 debt |
| Refinance Mortgages | £1,000/year per 1% rate drop |
| Debt Over Savings | £200+/year per £1,000 paid off |

Reduce Personal Expenses

| Action | Typical Saving |
|----------------------------------|--------------------|
| Mobile Bills (Haggle) | £300/year |
| Boost Savings Interest Rates | £5+/year per £1,000 saved |
| Petrol & Diesel Savings | £100+/year |

Step 3: Still Spending More Than You Earn?

Reassess Your Budget

Recalculate your finances to incorporate new savings.
Identify if you’ve managed to balance your income and expenditure.

Avoid the Debt Spiral

Spending more than you earn leads to borrowing to fill the gap.
Over time, debt payments consume income, leading to financial instability.

Step 4: Painful Savings

If pain-free savings aren’t enough, it’s time to adjust your lifestyle.

Ask the Right Questions

Do I need it
If I do, can I get it for less

Examples of Lifestyle Cuts

Reduce takeaway orders from two per week to one (£250/year).
Cancel extra TV packages and use free streaming options (£100s/year).
Switch to homemade lunches (£500+/year).

Seek Community Support

Debt-Free Wannabe Forum: Advice on eliminating debt.
MoneySaving Old-Style Forum: Tips on thrift, DIY, and minimalistic living.

Additional Tools

Piggybank Budgeting

Allocate your money into categories (e.g., bills, holidays).
Use apps like Monzo, Starling, or separate accounts for better tracking.

The Demotivator Tool

Calculates how much small purchases (e.g., daily coffees) cost annually.
Helps identify areas where small changes can yield significant savings.

To Sum it all

A money makeover empowers you to take control of your finances, reduce unnecessary expenses, and improve your long-term financial health. Whether through quick optimizations or lifestyle changes, every step you take is a move toward financial freedom.