Alvin Hall - Seven tips for saving money

Below, Alvin Hall has given MyEggNest the benefit if his wisdom by showing us his seven of his top tips on how you can beat the credit crunch and save money.

1. Set a budget or daily spending for all activities, especially fun or impulse buys for the kids  - It is impossible to save or cut costs if you don’t have a measure against which to judge. Before you go on a holiday or weekend outing, sit down and determine how much money you can realistically afford to spend. If you are not good at budgeting, then set a daily limit for all spending and be resolute in sticking to it.
2. Let the children participate in the discussion by encouraging each of them to help set their own daily spending limit - 
   You may be surprised to find that the children enjoy this discussion and view it as an interesting and fun challenge. Don’t be surprised if they become competitive with each other—and with you. As the adult in the family, you must be firm with yourself and stop yourself from giving additional money that violates your limits. It isn’t harmful to ask your child if the item he or she wants to buy is within his or her daily limit. The child quickly learns to make more appropriate choices, which will help mitigate their use of “Pester Power.”
3. Take advantage of free or low-cost local activities and bring a picnic - With petrol prices rising, taking long drives can be costly. Look online or in your local newspapers and magazines for free or low-cost activities near your home. These could include local attractions, historic sites, museums, local festivals, and concerts. Cook and bring your own food. At most holiday spots, as well as at museums, amusement parks, sporting events, the beach, etc., the food is usually quite expensive. By bringing a picnic or snacks, you can save a lot. Plus, the food you make is usually a lot healthier.
4. Book well in advance - Spontaneity may be fun, but it usually costs more, especially these days. Airlines, big hotel chains, even car rental companies have computer programs to monitor the percentage of bookings. Prices can increase markedly as availability shrinks. The sooner you book the lower your costs are likely to be. For families that are a bit more flexible, you can also try to take advantage of last minute bargains.
5. Go where the sterling is strong - This was one of my favourite strategies when my rent gobbled up 68% of my take home pay. At the time Latin America was an extraordinarily inexpensive place to holiday and I went there frequently, often spending less money than the very limited amount I had budgeted. Perhaps this summer is the time to look at places where you money will go farthest, like the States. A related strategy to keep costs low if you’re travelling abroad is to take your holiday in places that are slightly out of season and where the pound is strong. The savings can be substantial.
6. Share your holiday with close family friends - Why not go on holiday with your good friends and their children, especially if both sets of children get along well. This can substantially lower each family’s costs of renting a villa or apartment, as well as the costs of meals during the holiday. To avoid friction, be sure to establish ground rules, especially about how additional costs will be covered and how the responsibility for keeping the place clean and tidy will be divided.
7. Take a series of low-cost mini holidays instead of one big holiday - I call this strategy being a tourist in my own back yard. I plan a series of outings near where I live to see the natural wonders or important places that I should have seen but for many reasons may not have. If the children are old enough, let each child select a location and find out some interesting information about it. Make sure you set a budget for each outing. You may also want to put your child in charge of monitoring the spending relative to the budgeted amount, thus combining fun and learning a basic feature of personal finance. Around 8 or older is a good age at which to let them do this.

Source.  Alvin Hall and Dorling Kindersley

• Alvin Hall’s Magical Money Games (PDF)

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