Are you are more inclined to spend money as soon as you get it or are you a natural saver? Either way, check out our best saving money tips that you can start doing from today to help enhance your saving abilities. Become that master of saving that you always dream to be!
These tips can also be passed on to younger generations, be it your children, godchild, niece, nephew, etc, to teach them how to save money that will help them become gifted savers and set them up on a path to financial freedom.
So, here are our top ways to save money:
1. Calculate your outgoings
Before you begin your saving journey you should make a list of all your essential expenses. This includes things like rent, utility bills, and phone contracts, but does not include expenditures such as dining out, takeout, buying a new console game, etc. This will allow you to understand the money you need to keep at the very minimum before you can realistically save
2. Save small amounts often
A simple strategy is to save even if it is a small amount where many experts recommend saving 10% of your income at the very minimum. We do not recommend you spare anything you cannot afford as this could trip you up further down the line.
Start by saving whatever you can, even if it is just one percent of your income – We all start somewhere. As your financial situation begins to improve you will get used to the discipline of saving and can bump it up.
3. Increase the amount you save when you receive more money
As and when you receive any additional income you should try to keep your expenses the same and increase the amount you save. For example, if you have fixed outgoings each month, do not need anything, and you receive a 10% pay rise, you should put that additional income directly into your savings as opposed to leasing a new, fancy car.
4. Saving must be a priority
Next, make saving a priority. Many financial experts recommend “paying yourself first” where you save your set amount before you pay your bills for the month. Savings become the priority followed by your monthly bills. Any money that is leftover can be used for your everyday purchases.
5. Set up a direct debit straight to your savings account
Consider automating your saving each month with a direct debit straight from your current account. Both my partner and I find this to be the most painless way to save. We have a direct debit come out of our bank accounts on the same day that we get paid, therefore, in a sense, we never see the money. You do not miss what you do not have, right.
If you are worried that some months you might not be able to save the full amount and are concerned that you will not be able to access your savings, we would suggest setting up an easy access savings account. This way you have peace of mind knowing you can still get hold of your money with no penalties.
6. Start saving whilst you are young
If you are reading this at a later stage in your life this may not apply but start saving at a young age! The younger you start saving in a disciplined way the better. However, should you have children of your own and want to give them a head start in life, start having them regularly save now. They will likely develop a lifelong savings habit.
7. Save money on everyday expenses
Lastly, learn how to find a bargain and how to reduce your expenses. The less money you spend, the more you will have to save. This is not to say that you should just go without, instead, you should learn how to get a bang for your buck. There is nothing wrong with that middle aisle in Aldi…
By following these basic seven tips, you’ll be well on your way to building your savings in no time! Need more advice? Check out more from the UK’s top finance bloggers here!
James Banerjee is an Account Director who graduated from the University of Kent in 2014. He works in SEO on clients such as HSBC UK and Nestle and he has a keen interest in personal finances and money-saving advice.