I am a careful financial manager in my everyday life. I know exactly what causes household expenses and how large they are. Now, in late summer, however, we have had to acknowledge many upcoming changes regarding rising everyday prices. Raw materials, interest rates, and energy prices. The linked headline summarizes the topic well. The worst is yet to come. Have you already thought about how you will pay, for example, the 3-month electricity bill due at the turn of the year? It might not be at the usual level we’ve grown accustomed to over the years. The bill’s sum could be many times higher. Similarly, there is upward pressure on mortgage interest rates. These together erode household purchasing power and will certainly be reflected in domestic consumption. I am not yet in distress myself, but the topic is of great interest, and advice is valuable to everyone.
So, how to save and increase your household’s purchasing power?
Increasing the cash buffer
Using dividend income for consumption instead of reinvesting
Comparing contracts
Cutting unnecessary monthly payments
Monitoring and rationalizing energy use
Investments in energy efficiency
Postponing non-essential investments (renovations, car replacement, smartphones…)
If I start myself, almost all of the above-listed items are already somehow underway. In addition, we moved out of a dwelling heated directly by electricity and at the same time shortened commuting distances. Now there are energy investments for the holiday home (air source heat pump (ilppi) + grid-connected solar power). Thinking about electricity contracts is ahead – wondering if it’s worth jumping into spot market electricity (pörssisähkö) – I will monitor the electricity market in October-November before making decisions.
How about others? The aim is to collect easily implementable practices that would increase purchasing power on a monthly basis. The savings can then be put into stock picking or even funds, perhaps with a monthly savings mindset.
And I went through my standard grocery list (yes, my mother tongue teacher is proud again), and with a few adjustments, I should save a euro or so a month.
The length of that commute is a bit iffy. Usually, living a bit further out allows for more space and/or a more affordable place. Now that even borrowed money has some value, at least for now, a penthouse in the big city costs a pretty penny in increased interest expenses.
I haven’t done an exact calculation, but food alone already costs a considerable amount. Even if the wife ate less, the growing youth can eat the household into a cash flow crisis Restaurants, clothes, and other services are things where you can easily and unknowingly sink a euro or two. It’s worth favoring second-hand whenever possible.
If you already live relatively frugally and can’t save more without reasonable effort, it makes more sense to do a bit of extra work to cover expenses.
Commuting or going to hobbies (also with children) by bike, walking or running. Possibly smaller purchases from the store as well. Body, mind and wallet will thank you.
Edit: And investing in health and exercise in general seems undervalued. Who knows what kind of nursing shortage there will be in 5-10 years? How long and how quickly can you get treatment? Hard to measure in money…
But to the point.
-Adjusted electric heating in an electrically heated detached house to 18 degrees in every room. Heating with a heat-storing fireplace needs to be increased.
-Reduced use of lighting
-Shorter showers and with slightly cooler water
-Reduced sauna time and perhaps a bit less frequently (1-2 times a week)
-Only one streaming service in use at a time
-Canceled unnecessary insurance (travel insurance, as there are no plans for leisure travel)
-Postponed investments in entertainment devices unless absolutely necessary (monitoring future electricity prices)
-Housing loan has interest rate protection
-Cash buffer has always been over 3 months’ expenses
-Cooking larger quantities at once (several portions)
-A bit more consideration time and thought on the necessity for general consumption
-Reduced unnecessary driving
-Less restaurant and takeout food
The economy will surely endure, but now are easy times to burn unnecessary money on living. Some of the savings are also for the stock market. Funds have been reserved for declining prices, and I’d rather put them there for the future when the market starts to look that way.
Good and important topic to bring up. A great many excellent suggestions have already been made. I’ll add one more perspective.
During the COVID spring, I noticed the benefits of spending time outdoors (in nature). Of course, my fitness improved, my mind cleared, etc., but regarding this saving theme, one thing I noted was that the more I moved outdoors, the less I had of first-world standard of living expenses (cafe/restaurant visits, “unnecessary” shopping trips, impulse purchases from the couch, etc.). Of course, with good discipline, one could cut down on the aforementioned expenses anyway, but moving helped significantly in cutting costs quite unnoticed (unbidden and surprisingly, I’d say). Moving is also a relatively inexpensive hobby, although one can certainly spend a small fortune on equipment if desired. Additionally, a body in good shape helps to better withstand mental pressures, which will undoubtedly be present in many households this coming winter…
A mortgage is the most significant expense for many. If you’re concerned about your ability to pay your mortgage and the interest rate adjustment date is still far off, you can get short-term “protection” by re-evaluating your mortgage now and adjusting the interest rate (of course, it largely depends on how high you believe interest rates will rise, how much you owe, etc.)
It’s also a good idea to check out options for payment holidays now if, for example, large electricity bills are expected in winter.
Everyday Consumption
Ordering groceries online (e.g., from S-Group’s online store) can easily significantly reduce your grocery bill. It’s much easier to find the cheapest options across different product categories, and ordering in advance largely eliminates impulse purchases.
If you have comfort underfloor heating in your bathroom, reducing its power or switching to a programmable thermostat (e.g., heating for a few hours in the morning before waking up) can save a lot of money (of course, installing such a system costs a few hundred euros).
This isn’t exactly a savings tip, but I’ve noticed the beauty and importance of budgeting and carefully recording and tracking expenses in my own finances. Previously, I went more by gut feeling, and even though I saved money every month, I couldn’t say very precisely where the money eventually went. Now I record every expense and estimate the expenses for the next month. For me, just having to record all purchases has cut down on unnecessary shopping. Accurate information about my financial situation has also lowered my stress levels, which were already unusually high due to rising costs.
You should never turn off underfloor heating in wet rooms, although you don’t need to have them on full blast either. It’s also good to note that as the heating season begins, waste heat will be put to good use.
-Sold a hybrid car a couple of months ago and got a 2004 Corolla instead.
-When changing apartments, opted for a cheaper apartment with district heating instead of a lavish all-electric one.
-It’s hard to save more on food; I practically know the price per kilogram of everything I use by heart and can make good food cheaply.
-Audiobook services are paused, and only one audio service runs at a time (currently Spotify).
-Children’s clothes and other gear are always bought from flea markets; only car seats are bought new.
-Just sewed the third patch on my pants; I rarely buy clothes.
I earn about the median Finnish salary, and with that, my savings rate (which I easily see from my monthly Excel tracking that covers all expenses) has consistently been around 45-50%. Now, both children, interest rates, and electricity are putting pressure on this, but spending discipline simply needs to be boosted accordingly.
Of course not off, but optimized according to usage For example, at my leisure property, I have an old-style thermostat with poor settings. It has now been replaced with a combination thermostat + air source heat pump (ilppi) for heating, meaning we’re seeking better efficiency for heating. I read that a bathroom comfort floor heating system alone can consume 2000-3000 kWh per year when in operation.
Well, you’re probably not spending all your time showering the walls with water at the leisure home, so moisture won’t build up as much.
It’s also not worth keeping the heating on unnecessarily high in cabins. Water heaters and pipes can be emptied of water for the winter, so the temperature can be lowered significantly. Dry-keeping heating is also a good option.
Of course, in our detached house, we have a couple of compost bins to help with organic waste. But my wife challenged us a few years ago to try separating plastic from mixed waste as well. In the end, it didn’t cause much extra trouble; it goes to the waste collection point during a grocery trip in the same way as metal, glass, etc.
The amount of plastic was absolutely shocking, and the practical effect is that the garbage truck empties our bin every two months. We have two kids of daycare age in addition to a cat. We’re already saving a few euros concretely!
I myself try to take the following actions, and I’ve already noticed them having an impact.
I minimize car usage. I do small grocery runs at the local store by walking/cycling. When I use the car, I plan it so I take care of as many things as possible on the same trip. Car mileage has dropped by over 50% with these arrangements compared to before I started.
For breakfast, I eat oatmeal and a cup of water. My blood vessels and stomach thank me. I get coffee at work, paid for by the company. It’s affordable, filling, and nutritious, although not very sexy, and with this advice, you won’t gain followers on Life-quality social media.
I make my own lunch for work. The owner of the lunch diner suffers every day because of it, but not everyone can be a winner. I compensate for this by always buying “Kotimaista” (Domestic) brand products on my Prisma trips. At least someone wins, as long as the SOK Group doesn’t exploit the poor agricultural entrepreneur.
I reduced my alcohol consumption. This saves a few tens of euros a month.
As a result, I feel better, I’m more energetic, and I actually have more money available than before the austerity measures. Wasn’t it supposed to go differently?
A current topic. My wife and I just had this discussion yesterday.
These have already been done:
increasing the cash buffer: unfortunately, there were also significant losses from investments
continuous monitoring of total electricity consumption with a meter connected to the electricity meter
avoiding the use of desktop computers
however, this can be revisited during the heating season, as the heat will be utilized anyway
monitoring energy (specifically electricity) consumption:
switching off some devices completely during the most expensive hours
shifted the control of water heater heating from the transmission company to start at 2 AM (usually almost the cheapest)
postponing non-essential investments is already normal anyway…
we already drive used cars
we don’t buy phones over 200 euros anyway, and those were already renewed last year
I can’t think of any significant important investment except potentially a home, but
if one is acquired, it must be bought with savings
cutting unnecessary monthly payments
dividend flow can no longer be used much as shares have been mostly sold, but other investment income is available
diligent use of the fireplace and baking oven, which needs to be increased in winter
opportunistic freezing of discounted (red-label) foods
hoarding toilet paper as the price is reportedly rising (started)
communication devices moved behind a larger UPS
electricity can be cut for a couple of hours without interrupting work or using the Inderes forum
using the dishwasher and washing machine with a timer during cheap hours
Planned/under consideration:
significantly reducing living costs
would definitely save the most
but involves rather large one-time costs and other disadvantages
acquiring gas-fired heaters
stacking soapstones or similar indoors to store heat
lowering indoor temperature
completely cutting off heating during expensive hours
cutting off all electricity during expensive hours
overheating during cheap electricity times with timers
acquiring a generator
doesn’t really save energy but is sometimes cheaper than electricity bought from the grid and would solve power outage risks
diligent use of the baking oven instead of electric cooking appliances
acquiring larger batches of food and/or so-called red-label foods
taking a second car out of traffic use, at least for now
tendering contracts, more specifically what has been considered/is under consideration:
phone bills: the savings from these might not currently be worth the effort. In practice, one would have to engage in “operator hopping” to get perhaps a 10e/month saving in the overall economy, which is ridiculously small compared to the truly large expenses.
electricity contract: currently, spot electricity through joint tendering with certain price caps. (Company contract.) In practice, it’s unlikely to find cheaper, as fixed contracts are still more expensive, and usage cannot be optimized for cheap hours.
lease agreement
moving would work but, as said, incurs high one-time costs
could try to negotiate a discount with the landlord for the winter months. After all, it’s his property being kept warm, not ours. If he doesn’t agree, then let the house freeze…
If you have the choice between taking lunch benefits as salary or as a lunch card, packing your own lunch or, if possible, eating at home during remote work can easily save you over 100€ a month. Many lunch spots have also raised prices to around 12-13€.
Cook larger quantities of food at once. You’ll save on electricity, fewer trips to the grocery store, and learn to optimize food waste. And sorry to those investing in Kesko, K-markets are generally more expensive stores. Favor S-Group and LIDL, and your wallet will thank you. Check for discounts in advance and broaden your culinary repertoire. Just recently, LIDL had chicken fillets at -35% off the normal price, and a free egg carton when purchases exceeded 60€.
Paper towels: Families with children go through vast amounts of these without noticing. Cut the paper towels in half. It serves the exact same purpose, but less paper goes to waste, and it lasts twice as long.
Sauna use is demonized due to high electricity prices. However, if an average sauna session costs about 2€, have you considered how much savings can be generated from that one sauna session, especially in houses with direct electric heating? Especially if the house has heat recovery in the ventilation. This might not be a direct saving tip, but the matter isn’t so black and white that you should stop sauna use completely I won’t be saving on this.
Learn to take quick cool or cold showers instead of long warm ones. This has a big impact on consumption.
Although Lindex’s success is highly praised on the forum, buy children’s clothes, especially, second-hand. You’ll save a considerable amount, for example, on snowsuits for the upcoming winter season. Why not also buy your own clothes second-hand or from Outlet stores, which often offer significant discounts of 30-60%. In general, buy clothes less often and focus on quality and technical features.
Do you constantly subscribe to streaming services? How much do you spend per month on Elisa Viihde, Netflix, HBO, Amazon Prime, Disney+, etc.? Consider how actively you use each of them. For example, Amazon Prime has a new Lord of the Rings series, and HBO has new Game of Thrones. Consider whether you need episodes weekly or if activating the service for a month at a time, when you find something interesting, would suffice.
Do you really need an electric car? Many justify buying an electric car as an economical option. Then, when asked how many kilometers they drive, and the person replies that nowadays, with a lot of remote work, it’s about 10,000 km per year, it’s hard to justify the purchase with savings. If fuel prices stabilize at this ~2€ per liter level and a car consumes an average of 6l/100km, then fuel costs roughly 1000-1500€ per year. So, if you don’t actually drive a lot, think again if you need an electric car, or if you just want a new car. Consider depreciation, rising insurance costs, the trade-in difference for buying the car, and potential financing costs.
Restaurants, clothes, and other services are things where you can easily and unknowingly sink a euro or two. It’s worth favoring second-hand whenever possible.
For example, at my leisure property, I have an old-style thermostat with poor settings. It has now been replaced with a combination thermostat + air source heat pump (ilppi) for heating, meaning we’re seeking better efficiency for heating. I read that a bathroom comfort floor heating system alone can consume 2000-3000 kWh per year when in operation.
I won’t be saving on this.