So, I thought I would come on here today to share some of my money saving advice with you all. I want to preface by saying I'm aware that this advice will not apply to everyone and there are people in financial situations that mean that they are unable to save. This post is more for people who spend frivolously and at the end of the month look at their bank account and wonder where all their money has gone. Hopefully some of my tips will help you towards saving more, whether it's just for a general savings account or for a special purchase.
Tip 1: Evaluate Your Spending
Whenever I try to help someone with their finances this is the first thing I get them to do (my mum taught me this too). Take a notebook and write down first your monthly income at the top of the page. Then, go through a bank statement and write down all of your guaranteed monthly outgoings, for example, rent, bills, food, public transport, Netflix etc.
From the list of expenditures, assess whether or not all of them are necessary. Do you really need Amazon Prime and Netflix? Do you need to pay for that monthly app that you don't use anymore? It's very easy to buy into monthly direct debits that potentially aren't being used in your life anymore.
If you find that you can remove any of these monthly spenders then do so, cancel them immediately. Then, takeaway the amount you spend each month from your monthly income. What are you left with?
This leftover amount is what you have to work with in terms of saving. Generally, I try to save around 40% of that leftover amount into an ISA and then the rest is just free to do as I please with. But if I am saving towards a specific item then I may move some of that money into a separate account or a Monzo 'Pot', which is a bit like a savings account but with no ties on it.
Tip 2: Prioritise What You Are Spending On
This is a big one for me. When travel was a thing I would try to travel somewhere monthly and people would ask how I could do it, when in reality it was just because I prioritised my spending on travel. What you decide to prioritise is entirely up to you. Some people would prefer to spend their money on a night out drinking, others on designer bags, others on meals out with friends. Honestly, there is no right or wrong way to spend your money. The problem lies when you are spending £100 on meals out, but you would rather be spending that money on a new dress you've wanted for ages.
Things like coffees, takeaways and meal deals can all add up and if you look at the amount you're spending on these things you may reevaluate whether or not this is where you want your money to be going. Try to replace these things with packed lunches or coffees from home to save money in these areas.
Unfortunately it is not always possible to have everything you want unless you're extremely wealthy, so prioritising what is really important to you is the most crucial part.
Since not being able to travel, my spending habits have changed slightly. As I am no longer searching for bargain holidays I am more likely to treat myself to a new dress or bag that I really want. I imagine when we are back to my normal times, then I will want to spend that money on travel again and so dresses will become less of a priority for me.
Tip 3: Savings Challenges
I don't actually know if this is the correct name for them, but my fiancé especially has found these to be really helpful with saving (and he was absolutely terrible with money before he met me). But last year he decided to take part in one of these challenges in order to have enough money for Christmas presents and he managed to save around £600 in the end!
The idea is to save very small amounts daily or weekly and put the money into a separate Monzo pot or account so you really don't notice the small amounts leaving your accounts. Here are a couple of examples that myself and my fiancé have used to save. These are great ideas for saving up throughout the year or for a certain date, for example Christmas presents.
1. Start at saving 25p then each day increase the amount by 1p every day, e.g. 26p, then 27p, then 28p etc.
2. Start with £5 on the first day, then decrease the amount by 1p every day.
3. Write 100 bits of paper labelled 1-100 in an envelope. Pull out one piece of paper every week and whatever amount is on the paper, put into your savings account.
You can also get certain apps that round up spending pennies and save the extra pennies into a savings account which is a good idea too.
Tip 4: Avoid Spending Money Just Because It's There
Seems pretty self explanatory, but I know how tempting it can be on payday when a huge lump sum of money is deposited into your account to spend it all in one go. A lot of people I grew up with would blow their entire month's wages within the first week, then find themselves struggling for the remainder of the month. Remember, you don't have to spend money, just because you have it. A lot of people fall into this trap. The best thing to do is remove the money you want to save immediately and place it into a separate account or a locked Monzo Pot.
I hope these tips have been useful for you and perhaps have given you a bit more inspiration on how to save up some extra pennies this year! Be sure to leave any of your money saving tips in the comments so that other people can learn from you too! x
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