It’s easier said than done, but we all aspire to put aside some money for an emergency, a treat or a rainy day. But it is not easy for those that operate daily on a tight budget. With that in mind, Moolr took a look at how to save money.
It makes sense to set up a standing order with your bank so that a set amount is transferred straight into a savings account. A good time is on the day after you get paid. This can go into a single account or multiple accounts that serve different needs.
This is how I saved up for a holiday. I sent £10 a week went into an account run by a friend. I could not access the money, and I eventually built up over a £1000. In addition, all coppers go into a bowl at home, and I recently cashed on over £75 built up over a year!
You can also check your balance prior to being paid and if you have money spare transfer some into a savings account.
You need a clear understanding of what disposable money you may have on a monthly basis before you can start saving. This requires you to organise your outgoings and incomings. This gives you a clear picture of where you stand and what you can afford. Utilise direct debits and standing orders to make life easier. Many companies offer rebates for those who pay this way.
It’s easier to save money when you have something to look forward to. Jot down your goals and remind yourself why they’re important. For example, if you are saving for a deposit to purchase your first house, you should note down why this means so much to you. Regularly check and update your goals to spur yourself on.
We all want the best things in life, but often that simply isn’t practical, if even possible, Decide if you can make sacrifices without ruining your quality of life. Such sacrifices could include downgrading your motor vehicle, getting a cheaper mobile phone or just eating out less often. If you smoke, the advantages of quitting are obvious.
In addition to sacrifices, get rid of things you already own if you use them. You will also be glad of ridding clutter from your residence. I once made over £100 doing this from a car boot sale.
Setting some ground rules helps you curb unnecessary spending. For example, you could set a daily or weekly limit on your spending on nights out or restaurant meals. Pay with cash instead of cards when you go out. This helps you know where you stand financially. It may also help you make impulse buys.
Other rules to think about are substituting supermarket own-brand groceries for big brands, or setting spending limits for clothes and shoes. Just keep track of the savings you make this way and you’ll start to see how worthwhile your rules are.
The amount you save each month depends on what you can afford after essential spending. Should you require to spend on something unexpected, calculate how lowering your savings amount can help you take the hit. Likewise, if your income goes up, make sure your savings do as well.