Credit Crunch – Is Pay As You Go the way to go?

Many people in the UK are suffering the effects of the credit crunch with many going into debt, struggling to pay for their mortgage or cover their credit card payments. Saving money is becoming more and more important.

Saving Money

As cash becomes more scarce and family budgets tighter, is it time to consider moving away from long term contracts and move to cover expenses for such as the mobile phone or gym membership on a Pay As You Go (PAYG) basis?

Is it time to adopt shorter term deals with no strings attached? Can they help with saving money?

As we enter the New Year many people are trying to keep to their New Year resolutions, like getting fit and shedding some weight. Alongside these there’s the opportunity to consider your finances and also get them into as good a shape as possible.

Finance expert Lawrence Gold has given his top financial New Year resolutions. These are around some of the most popular resolutions and consider how, from a financial perspective, in this economic climate they might be achieved. Lawrence provides some good saving money advice:

1. Getting Fit

Getting fit is a very popular New Year’s resolution.

Full gym membership is costly though and no more so than if you only go once or twice a month. To make long term gym contracts work financially you really need to be going to the gym 3 or 4 times per week.

A cheaper option might be to use your local park to run in or work-out to one of the many exercise DVDs flooding the market.

If these don’t suit you then local leisure centres usually offer a PAYG option. You can find one near you by visiting you local council’s website or searching online for gyms in your area.

By attending the gym on a PAYG basis say six times per month it could cost you around £30 per month or £360 per year. Compare this to the £50 + monthly fee,  or £600 + per year, at the big name gym clubs and straight away you can see how saving money can become a reality.

2. Wardrobe revamp, get some new clothes, designer handbags etc

Starting the New Year with a new wardrobe might sound fantastic. Keeping up with the trends may be tougher now that we’re in a recession. However, there are companies that hire out accessories and designer fashions for every occasion. for example offers designer handbags such as Gucci, Chloe and Louis Vuitton for hire on a monthly basis.

If for example you’ve got some particular outings planned and want to have a designer handbag to complement your outfits then hiring one for a month or two is a lot cheaper than spending out a few hundred pounds or more on buying one.

There are also secondhand clothes boutiques through which you can buy and sell designer clothes. Invariably offering excellent quality, these boutiques are a fantastic way of filling your wardrobe at a fraction of the price it would cost to buy the clothes new.

3. Make more of the weekends, see more of family and friends

Seeing friends more, being more sociable is another popular New Year’s resolution. Invariably this involves travel by car. Is owning a car the best option though, considering the tax, insurance and fuel costs, not to mention the likes of the congestion or toll road charges.

Leasing a car may be a financially attractive option.

Another option, as Lawrence points out, is to rent a car just when you need one.

This could be particularly attractive for people who use public transport for commuting during the week and generally only need a car at the weekend.

With schemes available from Streetcar and low cost car rental business such as EasyCar, it may be more economical to take this route, a PAYG car.

4. Reduce Mobile phone costs

Many of us have signed up to long term mobile phone contracts and there are many good deals on offer. However, there also some good short term or PAYG deals to be had now.

Depending on how much you really need to use your mobile phone, opting for a PAYG or monthly SIM only mobile phone contract can help with saving money.

There’s the T-Mobile Solo offering for example.  This is a 30 day contract plan which is based on SIM only (you use your own phone and number) and includes high numbers of minutes and texts. Under Solo, currently, for £20 per month, you get 600 minutes and unlimited texts.

5. Take a Holiday

The cost of holidays are significant and many are considering cheaper holiday solutions. This might mean not going as far, staying in self-catering accommodation, staying in lower star hotel accommodation or perhaps opting for a caravan based holiday.

One option that is growing in popularity is to undertake a home exchange. There are a number of online sites, such as homelink and homebase-hols, which provide a home exchange service. A membership fee is charged but usually it is quite low and quickly pays for itself once you undertake an exchange

By offering up your home for someone to holiday in, while you go and enjoy a holiday in their home, it saves significantly on costs. The intention is you don’t pay rent on the property you holiday in and the person exchanging with you doesn’t pay rent for holidaying in your home at the same time.

By exchanging homes and saving money you might be able to holiday for longer or go to a long dreamed of destination.

By exchanging, not only can you save money, you can also make sure you have a holiday base that has all the space, comfort and privacy of home, located in the holiday destination of your choice.


  1. Nina 10th January 2009
  2. mat 10th January 2009

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