The world is split into two types of people – those who save money and those who don’t. Unfortunately, it’s often the case that if you never learned how to save when you were younger, you’re not going to naturally start doing it when you’re older.
However, saving money is just a skill like any other – and that means it can be learned. You have to change your mindset, your behaviours and your relationship with money, but there are some simple things that you can start doing immediately that will set you on the right course.
Follow these 5 top tips for saving money now and you’ll get the benefit in the future!
1 – Make a budget
In order to get yourself setup for saving, you have to start understanding your current relationship with money. You also need to bring your spending under control so you have money to save.
Start a budget. Track all of your income and expenditure, separating it into categories. Use a simple spreadsheet or one of the many smartphone apps that will automate much of the process. Take a close look at where you’re overspending – you’ll probably be surprised to find out how much money is frittered away on useless expenses every month.
2 – Trim the fat
Once you’ve started tracking your spending and bring unnecessary expenditure under control, it’s time to trim even further. Now you should look at where you can make savings. The easiest way to start is to use price comparison sites to try and get cheaper deals on utilities, broadband and other monthly expenses.
Be ruthless. Do you really need that extra cable TV package, or would you be better with Freeview? We often sign up for contracts like these without knowing how much we’ll use them and we rarely take stock once we’ve started paying for them.
Then look at other expenses, like unused gym memberships or meals out. Even morning coffees can be cut down; invest in a good travel mug and make your own before you leave the house.
3 – Self-improvement can save money
Use your desire to save to improve on yourself. If you’re a smoker, quitting could save you hundreds or thousands of pounds a year. Cutting down on alcohol and takeaway meals could do the same. Instead, put the money directly into a savings account and use your increasing savings as an indicator of how much you’ve improved upon yourself as well as your financial situation.
4 – Supplement your income
If you’re really committed to saving extra money, you could consider taking on a part-time job or creating new income streams. Side hustles are popular, including Uber driving, online tuition or selling online. Whatever you decide, just make sure that you maintain your work/life balance. That said, committing to extra work for a specific period of time could be just what you need to get better control of your finances and start saving money for a rainy day.
5 – Think about the future
It’s all very well putting money into a savings account, but what happens when you have an emergency? Say the boiler breaks down or the car needs repairing – will you need to use up your savings to sort it out? That means you’re back to square one, which can be demotivating and start a slide back into your old ways.
Instead, set up two savings accounts. One of them should remain untouched as much as possible – this is your long-term future you’re saving for. The other is your emergency fund – you don’t need to put as much into this, but you should set aside a portion of all of your savings to go into this fund. This is the one you’ll use for short-term emergency expenses without eating into long-term savings.
Alternatively, if you’re just looking for some cash to help you get from mid-month to payday due to an unexpected expense, you could consider opting for a payday loan.
Quick fixes, long-term gains
Each of these tips can be actioned right now. Tell yourself that today is the day you start saving. While it might take a while for you to get into the habit, the actions you perform today will have an outcome in the future, so don’t put it off any longer.