The Money Diet by Martin Lewis
Martin Lewis is a familiar face when it comes to spending and saving money. You’ve probably seen him on TV and hear him on Radio or read one of his columns in magazines or newspapers on how to become savvier with your money. He also has a dedicated website with a whole community passing on their knowledge.
I picked up The Money Diet as I expected it to really help with pulling a much need budget together and to maybe help with some of our spending and financial habits. Though we already have a budget and certain money saving habits in place, there is more that we can do to address our finances.
One of my goals, which was inspired by this book, is to look at some of our regular annual spending such as insurance and some of the pricier items that we use regularly. At the beginning of the book there is a calorie counter which gives an outline of what you could save on items such as broadband, flights, water bills. The book then highlights the page to go for the ‘recipe’ which takes you through an easy to follow process on how to save money on this particular item. After reading that section, I was certain this book could help.
The Money Diet is split into three sections:
Part 1: Financial Fitness for life
Part 2: The Crash Diet (this forms the subjects in the calorie counter)
Part 3: Healthy Eating.
Part 1: Financial Fitness for life
Financial Fitness for Life guides you to take charge of your money and dispels many of the myths that we hold about money, giving tips on how to shop better and to haggle on price. This section is split into 10 chapters which make up The 10 Golden Ingredients. Each chapter goes into more detail of the ingredients with some great examples of how what you are learning works in reality.
The 10 Golden Ingredients are:
- You’re In Charge.
- Prepare Your Pocket.
- Know Thyself.
- Be a Better Shopper.
- Forget Loyalty.
- Talk to People.
- Haggle.
- Holler.
- Think through their logic.
- Find the Loopholes.
After reading this part I pulled out my laptop and went back to our annual budget. I pulled it apart and added bits I hadn’t thought of to make it more of a realistic reflection of what we need (including emergency savings pots). I also added the necessary standing orders to make the money required go straight to the relevant savings pots when we get paid. This way it doesn’t get spent.
On another sheet I wrote a list of items that we use on a regular basis then spent some time going through different supermarkets for our weekly shopping to compare our regular products. I didn’t do this by packet price, but rather by per 100g/1L/100ml so getting a true cost. Thankfully most of what we buy was cheapest through our regular supermarket, but it was a great exercise to go through to make us more aware of the pricing on products.
For our hygiene products I included specialist websites to seek out the best deal and bulk purchased these to go away in the cupboard. Though there was a larger upfront cost, this should allow us savings on our shopping in the long run. I have diarised to go through this again in a few months to stock up again if needed and will keep a sharp eye out for any price decreases.
I also took this opportunity to have a conversation with my family about how we spend what comes in, and to clarify what our priorities are when it comes to saving. We would like to replace our car at some stage in the next 12 months (dependant on how long our current car lasts) so making this our priority and putting some money to one side over the coming months will make this a little easier when the time comes. Plus it gives us something to focus on for that savings pot which makes it easier to do since we know the intention behind putting the money away.
Part 2: The Crash Diet
This section links to the calorie counter mentioned at the beginning of the book. It has comprehensive ‘recipes’ with information about typical saving, time taken and difficulty level. It mainly focuses on things like car insurance, current accounts, savings accounts, broadband and credit cards. Throughout this part of the book there are little snippets of case studies which helps to put the information being presented in the recipes into context.
Having worked on our budget I was able to see what we are spending on products like the ones noted above and diarise when they are due to be renewed. As the date approaches, I will spend some time researching other products with the aim of going with the cheapest provider. I expect this will be ongoing every time the renewal dates come around.
One thing Martin talks a lot about in this book is credit cards. They are a very expensive way of borrowing money. Personally, we do have credit cards with high interest rates. One of my main goals now is to look into credit cards with a 0% interest rate and transfer the balance on the high interest cards to one with 0%. Though there will likely be a fee for the balance transfer, but paying no interest will outweigh this initial charge while we work at paying off the credit card. In the future, I would like to build a better habit of paying them off in full quickly, and manage our habits so that we are using them less.
Part 3: Healthy Eating
The Healthy Eating section of The Money Diet talks through all the different types of ‘debt.’ There is a brief overview of how credit works following up with a more in depth look at mortgages, credit cards and personal loans.
There is a larger section on credit cards in this part of the book, this talks about different levels of credit card users and what to do in these scenarios which, again, I found useful for the future. This is completed with a section aptly named ‘Food Poisoning: Debt Crisis – What to do’ this talks you through what to do when you are in financial crisis.
I found this section very useful for expanding my knowledge and how understanding these products better can help me to compare the markets to get the best deals out there. One thing I probably wouldn’t look for myself as there are so many out there is our mortgage. This is definitely an area where it’s best to speak to a mortgage advisor as they will have a much better knowledge of the products available, the providers current rates and will stay on top of things during the remortgage process to ensure we are getting the best deal up until the last possible second.
What I learned from The Money Diet
My takeaway from The Money Diet is that you are in charge of your finances and to get the best out of your money you have to invest some time and effort into it to get what you need from it. Burying your head in the sand won’t help and talking it through is always useful. Whether you want to speak to a professional financial advisor, a friend or family member or utilise one of the money focused communities online, like Martin’s, there are resources and support available to help you get a hold of your financial life. If you’re not sure where to begin, this book is a great place to start.
Review by Thomasin Clarke
Office Manager, Bigmore Associates
