Are you one of those people that has good intentions to save every month, but it doesn’t always go as you’d planned? Do you find that some of your friends seem to have a natural gift for saving lots?
If you’re struggling to save money, you’re not alone! Data from the Office of National Statistics (ONS) shows that of people between the age of 22 and 29 years in the UK, about 40% have no savings at all, while around 10% have savings between £2,000 and £3,000. Only around 25% of this age group have saved more than £6,000.
Saving money isn’t an easy task and you’re likely to have some bad habits to break and new strategies to learn. Before anything though, it’s important for you to be clear on why you are saving in the first place. You could be saving for:
- A deposit for your first home
- A great holiday
- A new car
- Your retirement
Whatever your reasons, you should write down your goals and visualise how having more money will make you feel. Next time you’re tempted to make an unnecessary purchase, thinking of your goals should make you think twice.
Now let’s get you into some incredibly useful money saving habits…
1. Know your bad habits
If you want to curb your spending and boost your savings, you need to be realistic with yourself. You don’t need to feel bad about them, you just need to be more aware so that you can stop them in the future.
2. Assess how you think about money
Your current money mentality has been holding you back. Have a think about what money stories you have been telling yourself up until this point and challenge them. Have you been telling yourself that you’re young and just want to enjoy spending every penny? Ask yourself how your current mindset has been working for you over the past few years.
3. Make a distinction between what you need and what you want
When it comes to making decisions about purchases, you need to know the difference between needs and wants. It’s ok to like your expensive brands and the latest tech, but don’t be trying to keep up with all your friends and family.
Make a list of the things you want and be prepared to wait for them. Once you’ve hit a savings goal, you’ll be able to reward yourself occasionally with something from your want list. You may find that your wants change after a few months too.
4. Know where your money is going
You may think you know how much money is coming in and out of your account each month but having a rough idea may not be enough. A great way to increase your awareness is to use money management apps. Tracking your money more closely will help you to regularly review your finances and cut any unnecessary expenses.
5. Set yourself SMART goals
Saving without having any set goals is rarely effective. Neither is saying “I want to be a millionaire” or “I want lots of money when I retire”. What you should be doing is setting SMART goals that you can track and achieve. These are goals that are:
6. Reduce your bills
When was the last time you switched energy provider? Have you tried to negotiate a cheaper internet package recently? It’s always worth reviewing your bills and don’t let your services renew automatically without challenging the price.
You should always use price comparison websites to ensure that you are getting the best deal available at the time. Also, don’t be afraid to call up your providers to negotiate a better deal or to get them to match those you find online.
7. Set up automatic saving
Seeing what you have left at the end of the month and putting that in your savings isn’t a great tactic. Instead, you should set up automatic transfers that move a set amount to your savings straight after payday. Even better, set yourself up with a savings account that makes it more difficult to access your savings so that you aren’t tempted to dip into them.
8. Be frugal
It’s ok to buy things that make you happy, but if you’re really struggling to save it may be time to be more frugal for now. Assess where you can make cutbacks, for example, do you need subscriptions to Netflix and Amazon Prime or could you do without one of them?
9. Get rid of your credit card
Getting into debt will prevent you from saving. If you’re a culprit for spending more than you have, then having a credit card is definitely not a good idea. If you struggle to keep up with credit card payments, do yourself a favour and stop using your credit card today!
10. Check your finances regularly
Ideally, you should be reviewing your finances at least once a week. It doesn’t have to take you long, simply logging in on your banking app and checking your balance and what you’ve been spending on should help you to stay on track. By checking your balance regularly, you should also prevent yourself from running out of money before your next payday.
11. Use discount codes and coupons
Small savings can add up, so make the most of discounts and coupons when you’re spending. If you’re buying something online, you should definitely check for any available discount codes. You can do this with a quick Google search or by using a tool like Honey.
12. Make yourself a packed lunch
Getting into the habit of buying lunch on the go is something that can rack up a big monthly cost. If you’re spending £5/day five times a week, this costs you £100+ per month. Instead, you should get into the habit of packing a lunch to take to work/university. This can be leftovers from the previous evening’s dinner, or you can do meal prep over the weekend.
13. Unsubscribe from tempting newsletters
How many company emails do you receive each day? Look, there’s a new sale at your favourite store! A well-known fashion brand has a new collection that you need to see!
Companies spend lots of money trying to convince passive buyers to spend more with them. One minute you’re checking your emails, the next you’ve spent £50. Remove temptation by unsubscribing from promotional emails.
14. Stick to the 30-day rule
Is there something new that you really want but don’t necessarily need? Making a purchase as soon as you think you want something can leave you with regret later. How many times have you bought an item of clothing that’s still in your wardrobe with the tag on?
If you’re a culprit for spontaneous buying, it’s time to adopt the 30-day rule. That’s when you set aside the thing you want and if you still want it after 30 days you can buy it then.
Becoming a good money-saver will take time. You’ve got new habits to build and old ones to break so be patient with yourself. If it’s easier, try to adopt one new habit at a time and build them up gradually.
Are there any other money-saving habits that you would recommend? Leave us a comment below with your thoughts.