Perhaps the most extraordinary aspect of the Navinder Sarao story — Mr Sarao being the trader who is accused of upsetting the biggest stock market in the world — is not his alleged financial markets skulduggery, but the details concerning his extreme penny-pinching.
“Nav only loved making money, not spending it,” tweeted Adam Whiting, a former colleague of Mr Sarao’s, this week. It’s a comment that is hard to argue with when you read about the young multimillionaire postponing eating lunch until late afternoon, when he could buy reduced sandwiches from the supermarket. Mr Whiting also recalled his former colleague spending £100 at Sports Direct in celebration after a £15,000 deal worked in Mr Sarao’s favour, buying another tracksuit. When the trade came back and he lost the money, Mr Sarao took the clothes back.
These details certainly suggest a man, who reportedly made £26.7 million while his mother worked two jobs, who takes saving money extremely seriously. He would, therefore, approve of the tips below on how to save money like an extreme penny-pincher: like a high frequency trader with a disinclination to spend the millions you make, in fact.
1. Never, ever, go to Pret a Manger. Would the so-called Hound of Hounslow waste his time flirting with the staff at Pret in the hope of a free coffee when there is money to be made on the stock market? He would not. This could save big money: officebroker.com estimates that the average worker spends nearly £90,000 during their working life buying lunch, as well as teas and coffees. A compromise is to purchase a Verismo coffee machine, currently available for £49 on Amazon, that makes Starbucks-quality coffee in your (modest) home.
2. If you really must have your own car and you’re not content with borrowing your parents’ — as our saving hero Mr Sarao does — buy your car at the end of the month. It is at this time that sales people are looking to meet their quota in order to obtain commission, which may make them open to negotiating. The Money Advice Service says that 64 per cent of people who try to haggle when buying a car are successful, and has a helpful guide at moneyadviceservice.org.uk.
3. Make sure you buy a small car: they cost less in initial outlay, petrol and insurance. Also, make sure you have enough air in your tyres: the AA has calculated that if your tyres are underinflated by 8lbs per square inch you will use between 4 and 6 per cent more fuel. You can search for new cars by tax band and fuel economy on the government website carfueldata.direct.gov.uk.
4. Should you hit a pothole and have to repair your car, make a claim from your local council or the Highways Agency for the money you’ve had to spend. For more information on this go to moneysavingexpert.com/travel/pothole-claims.
5. As most of us now know, Mr Sarao would time his start in the office, when working for Futex in Woking, after 10am so he could avoid paying peak-time rail fares. Another way to save money on train tickets is to split the journeys: if you are travelling from Oxford to Leeds, for example, it may be cheaper to purchase a fare taking you from Oxford to Birmingham, then Birmingham to Leeds.
6. And when at home, set the timer for your heating system to go off 30 minutes before you leave the house (this is the time the charity National Energy Action says it takes your home to cool down). This is to avoid paying for heating you are not using.
7. For similar reasons, turn off the oven five or ten minutes before the end of the cooking time — and if the weather is cold, keep the oven door open after you’ve pulled your meal out to help heat the house.
8. Keep your freezer full and your fridge not so full. Freezers are at their most efficient when at least 75 per cent full. Less empty space means your freezer has to work less hard to keep the temperature down. The opposite is true for fridges, where cold air is needed to keep the temperature down. Keeping the fridge fully stocked costs more money to keep everything cool. The Energy Saving Trust website at energysavingtrust.org.uk has a host of further tips on home energy saving and a home energy checking tool that predicts how much money your household could save by implementing them.
9. Move your money out of poor-value savings and current accounts. A surprising number of otherwise savvy people earn savings interest of as little as 0.1 per cent because they never get round to switching. You can now earn up to 1.5 per cent interest in the best easy-access accounts, and 2.9 per cent in fixed-rate bonds. People aged 65 and over can still get 4 per cent with NS&I’s pensioner bonds, which are on sale until May 15. Compare deals at websites such as Moneyfacts.co.uk, and remember to use your tax-free cash Isa allowance. Meanwhile, comparing and switching current accounts is easier than ever, thanks to a new personalised switching service from Gocompare, as we report on page 62.
10. Likewise, millions of people are paying well over the odds for mortgages that they took out years ago. Current deals that you could remortgage to include HSBC’s five-year fixed rate at a record low interest rate of 1.99 per cent, with a minimum loan to value of 60 per cent and a £1,499 fee.
How coffee shops eat up cash
A typical weekly expenditure
Cappuccino £2.15 x 3
Americano £1.75 x 2
Ham panini x 1 £3.25
Salmon sandwich x 1 £3.25
Chicken and bacon baguette x 3 £3.65
Total: £1,424.80 a year
Instead you could buy
11-inch Apple MacBook Air with 128GB storage and 4GB RAM, £749
One week all-inclusive at the five-star Baron Resort in Sharm-el-Sheikh with Thomas Cook Holidays, £686pp