Managing your costs to prepare for unexpected expenses

Managing your finances can be daunting, especially when you need to prepare for unexpected expenses. We all make New Year’s resolutions, and they can often be disastrous, with 80% of people failing by February and regretting it instantly — have you managed to stick at yours? One of the most common New Year’s resolutions is to cut down on spending, and although this sounds achievable, if you don’t have a fully-pledged strategy in place, the likeliness of failure spirals out of control.

Unexpected expenses can arise at any moment, and most aren’t prepared to deal with them financially. It all adds up. For that reason, we’ve made some assessments on how those extra savings can come in handy if something like that was to occur.

How much is commuting costing you?

One way to save on expenses is to change the way you travel — you will witness savings in your bank account. Using a megarider ticket, you will be able to travel as much as you want and can tailor your own needs to the ticket type. Whether you’re in need of a weekly bus pass for your travels, or a monthly one — you will find yourself making a huge saving in comparison to paying the normal bus pass prices every day.

If you own your own vehicle here, you can expect to spend around £168,880 over a lifetime. With efficiency growing in public transport, there is no reason for you not to consider making the bold move that could help you fulfil your resolution this year and save you a fortune.

Petrol was the largest factor when it comes to vehicle spend, costing £1,052.04 on average every year. Servicing a vehicle costs can add up to £441 over a twelve-month period — which can change depending on the individual’s situation. MOTs can cost up to £168.46 annually. Cost of parking is on the rise, and with more vehicles on the roads, there seems to be a higher demand. Over the year, a motorist can find themselves paying £145.80 on parking. When it comes to insurance, this can sway dramatically as younger drivers will find themselves paying a higher cost to be on the road — on average, insurance costs an experience driver £436 every year. Tax can equate to £116.35 on a yearly basis. Car supplies can cost a driver £29.61 and if you were to go abroad and wished to drive, holiday rental cars can leave you £180 out of pocket. Speeding tickets equal £25.12 for the average driver here in the UK. This would cost a driver £2,594.38 in total where commuters find themselves paying considerably less for a significant service — imagine the saving you would make with a megarider ticket!

Are you overspending on your lifestyle?

Is it worth buying coffee?

MyVoucherCodes has suggested that with over 21,000 coffee shops here in the UK, Brits are visiting around three times a week to get their caffeine fix. This means that Brits visit coffee shops around 156 times a year with an average spend of £8.52 — with travel expenses, this could go up to £13.85. This creates an annual average spending of £2,600, a majority of which could be saved if you were to opt for taking your own coffee to work.

If you’re in need of branded coffee, you can buy a 250g pack of ground coffee by Douwe Egberts — which can make a total of 30 cups. When looking to see how much a 1kg pack would cost, Amazon has priced the coffee at around £15, meaning that each cup of coffee would cost close to 13p. Try taking a flask to work and even purchasing an on-the-go coffee cup that will see you through your day.

Is it worth smoking?

With a spike in prices, many people aim to quit smoking altogether — with the average packet of 20 cigarettes costing £10.40, you’re shelling out £3,796 per year if you smoked one packet every day. This is a potential saving you can gain if you kick the habit. MoneySupermarket.com has stated that non-smokers pay around £6,309 less for life insurance, which could be something worth investing in for the new year.

This has turned many smokers to vaping. 10ml bottles of liquid cost around £5 on average — saving those who turn to vaping around £1,900.

Is it worth buying your lunch?

It’s often an easier alternative to buy your lunch on-the-go, rather than freshly preparing it at home. But what if we told you that, on average, forking out for lunch every day could cost you £1,288 according to research carried out by VoucherCloud? Evidently, you could make a huge saving by preparing your lunch at home — whether this is making a quick sandwich or taking in a tin of microwavable soup to heat up. When we looked at the total working days in 2017, there was 252 — if we went by Poundland’s price of tomato soup, which is 50p, you would find yourself paying £126! A massive saving for anyone looking to cut down on costs.

What unexpected expenses are probable?

One survey of 2,000 people carried out suggested that 54% of those asked had experienced an unexpected problem in the home, which caused them to fork out extra cash which they weren’t prepared for. On average, these costs totaled £248.70 — showing that any saving is beneficial for occurrences like these. 47% of these issues happened in the kitchen, a room which is essential to the day-to-day running of any home, and if you don’t have the money to pull out instantly, it could cause an everyday stress. Using the savings you would have made by taking your own lunch and coffee to work, quitting smoking, and travelling smarter — you will be able to make life easier. It was also found that 35% of people had to use a credit card to cover the costs of unexpected expenses. With 18% of them not being able to pay more than £100 on their own, 17% had to borrow from friends and family!

Will you be making better financial decisions this year to help you prepare for the worst?

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