Saving money can be difficult. Life chucks us curve balls like the boiler breaking, or a global pandemic! Sometimes we give in to temptations, and as a result our savings pot never really grows.
Financial experts advise having three months worth of living expenses as savings. For the majority of people this isn’t possible. Savings are important for unexpected expenses and things we are working towards, but t can feel like a huge mountain to climb. Saving money doesn’t have to be difficult, there are simple things you can do that make saving money easier…
1 Know Your Finances
If you want to save consistently you need to know all of you outgoings, and what you have coming in. Whether you use a spreadsheet, and app or pen and paper, make sure you know what your monthly outgoings are, then you know how much you can afford to set aside each month as savings.
If you have never done a budget before, use your bank statements to help you. Start with monthly costs that do not vary, such as mortgage or rent, council tax, insurance policies. Then look at other outgoings and allocate a realistic budget for food, petrol, and other variables. Finally allocate money for nice to haves such as meals out, and other entertainment. Which have a great household budget guide to get you started.
2 Make Your Savings Stick
Once you have allocated a set amount to save each month, set up a standing order to transfer it from your account the day you get paid, every month. If you never see the money you are never tempted to spend it, and therefore it makes saving money easier.
3 Allow Room in Your Budget For Fun
When setting your household budget, it’s important to allow room for unexpected expenses, but also some money for fun things. Whether that’s a takeaway or a trip to the cinema, if you plan these things into your budget you are less likely to be tempted to dip into your savings for the more frivolous things.
4 Use a Different Bank
Out of sight out of mind can make saving money easier. Set up a savings account with a different bank to your normal day to day outgoings. If they are in an account that you don’t see regularly there is less temptation to withdraw money. It just quietly builds up in the background and can be great motivation to keep going when you see that number has grown in a quarterly statement.
5 Consider Your Return On Investment
When saving it is important to look at how hard your money can work for you. Whether it’s an ISA, stocks and shares or premium bonds, it’s worth looking into and maybe having a chat with a financial adviser to see what your options are. Money Saving Expert has some great advice on savings accounts.
6 Set a Savings Goal
A Harvard Business Study found that those who set goals are 10 times more likely to succeed than those who don’t. This easily applies to saving money. Knowing what you are aiming for and having a goal will increase your chance of success. Whether that’s a short term goal like a new coat, medium term, such as a holiday, or whether you are looking longer term and looking to save a deposit for a house. A great way to set your goal is by using an online calculating tool. Pigly has great and more importantly, free, online calculators, including a savings calculator.
It’s really easy to use. Just enter how much you already have saved, and how much and how often you intend to add to this. You then select the number of years and the calculator shows you what that will amount to. You can even add your savings account interest rate and it will include that. It’s a great tool for planning your savings if you need a set amount by a set time. It’s also a great motivator when you see how much your savings can grow.
7 Increase your savings as your earnings increase
It’s important to review your finances and your budget regularly as costs change. Maybe you get a better deal on your car insurance, maybe your gas and electricity goes up. If you get a salary increase, consider how much of that increase you can allocate to your savings pot. Do it before you get used to having the extra money and you won’t know any different day to day but you will get the benefits long term.
8 Spend Consciously
It’s so easy to not think about the money we are spending when we make purchases online or use debit cards. It doesn’t feel like real money. Another way to save more money is to be more conscious of your spending. Consider maybe giving up buying a coffee everyday and see what difference that makes to your finances.
If you are interested in seeing how you can spend differently Lara Joanne Jarvis has recently completed a no buy year and has lots of information on how she found it, and tips on how you can do it on her You Tube Channel.
9 Use Cashback Sites
Quidco is a great site for earning cashback. Download the app, and before you buy anything check if the retailer is on Quidco. It’s really simple to use, and is definitely a tool that can make saving easier. I’ve been using it for three months and have earned £45. That’s purchases that I was going to make anyway. All extra money for the savings pot.
I think this is an appropriate place for a cheesy adage…
Look after the pennies and the pounds look after themselves.
I hope these tips are useful and help make saving money easier.
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