The first place to look for savings is in your non-priority spending. Cut out cigarettes and save £35 a week. Cut out your daily Starbucks and save £15 a week, which is £60 a month or £720 a year. Take sandwiches to work instead of buying lunch and save £20 a week, or £1,000 a year. Be tough but realistic and don't give yourself impossible tasks - you will only set yourself up to fail.

Most households can save £100 a year by switching energy supplier according to uSwitch.com. Do an audit of your home - switch to energy efficient lightbulbs, don't use standby on electrical goods and choose energy-efficient appliances when you need to upgrade. Switch to a bundle deal on your telecoms and TV, and look at how you use your mobile phone. Switching your mortgage can also save you money, although it may involve a fee.

Again, keep it reasonable but be strict with yourself. Don't spend on the cards again - ever. Not even for "emergencies" like holidays or concert tickets.

Be careful of "consolidating" your loans and credit cards into one "easy payment" option. Such arrangements can cost more in the long term. Pay off and get rid of storecards - they are one of the most expensive ways to borrow money. Once clear of credit card debt and other unsecured loans learn to live without them.

The interest on savings is taxed at 20%. To avoid paying tax on savings you can save into an individual savings account (ISA). You can save up to £3,000 a year tax-free in a mini-cash ISA. Otherwise you can invest up to £7,000 tax-free into an ISA made up of some cash and some stocks and shares.

Another simple, tax-free way to save money is to buy premium bonds. You can invest up to £30,000. The average return works out at about 3.5% over time, and all winnings are tax free.

The same good practice says you should save your full tax-free allowance every year. That means an ISA every year, either by investing with a lump sum or saving regularly each month. It also means building up your premium bonds. Once you have maximised your tax-free allowances and built up a cash nest-egg, then you can start to look at investing in other financial "products" such as unit trusts, bonds, pensions and stocks and shares.

Read the money section in the weekend papers and keep an eye on the "best buy" tables for savings accounts online and in print - you only have to learn what the jargon means once and then they start to make sense. Use online calculators to work out how much your repayments will be on big loans like your mortgage or car loans - savings can be substantial.

Teaching Kids Wise Money Habits

Money is a part of your everyday life. You use it to buy the things you and your family need and want. Buying food, paying rent or mortgage, buying clothes, taking a vacation, and paying for child care are some of the necessary things that require money. No matter what your personal beliefs are about money, we can all agree that it is part of our lives.

Children learn very early that you use money to get something in return. When you take your children to the store and buy something, they see you handing over money (or a credit card). They see you getting change in return. To get a gumball from the machine, you put in a quarter and out comes a big, round piece of bubble gum. The connection is clearly made. Although very young children may not understand prices or know how many pennies are in a dollar, they do watch and learn this exchange process.

From toddlerhood through adulthood, you can show and teach children about the value of money and how it’s used in their everyday lives. The use of money can also help children develop other skills such as saving, making choices, setting priorities, delaying gratification, sharing, and interacting with others. You can promote good lifelong money habits by modeling and sharing how you use money now and plan to use it in the future.

Using money involves using different math skills such as adding, subtracting, matching, and sorting. A child will learn how money "works" and how to best use it in stages, depending on his age and experience. As a parent or provider, you can help a child learn to use money and develop useful skills easily. (See chart on page 2.)

Research has shown that a child with positive social skills is more likely to succeed in school and in life. Some children need a lot of help to develop these skills. Research also shows that a child who is not able to interact positively with others tends to be unable to make and keep friends, and may have problems in school (such as acting out, and showing aggressive or violent behaviors).

Saving is an important part of learning how to manage money. Many children learn about saving by having "piggy" or coin banks for any money they receive. Saving money can help children learn how to plan, develop patience, and learn how to delay gratification—getting what they want. So whether you give your child an allowance or money for doing something in particular, this is a good way to work with him or her on saving.

Activities to do with your child:

Using money involves making choices. You start with a certain amount of money to spend and you make choices on how to spend it. When shopping, let your child observe how you make choices. Explain briefly why you decided on Brand A versus Brand B. "I could either buy this soap which smells good, or buy these two soaps which are on sale and will save me money."

Allow your child to choose items sometimes when you are out shopping together. Offer a choice of two items that you would agree on, and then allow her to choose one of them.

Saving and sharing money can be used as part of a lesson in reaching a shared goal. It is also a good way to promote working with others. For example, allow your child to share in helping with a favorite charity, a family activity, or a neighborhood project. For your older child, let him or her help decide what kind of charity or project you want to work on as a family. If money is needed in the project, let your child contribute and decide how that money is to be used.

Use Money to Practice Social Skills
Using money involves many social skills and interactions with others. From speaking with salespeople to
the social rules that go along with making a purchase, practicing social skills is a big part of using money in everyday life.

Talking with your children at an early age about money and saving is important. You can help them form positive lifelong skills around money. This also involves learning and using other important life skills as well.
No matter what your financial circumstances or personal beliefs are on the use of money, you can help your child become "money-smart" and best use the money system to his or her advantage.