Simple Tips to Save Money
Having money saved up is what provides the means for you to take advantage of situations, whether it's going to university at an older age or starting a new business venture. It gives you the financial freedom to do the things you want without worrying whether you can afford it too. Some people save money their whole lives and choose to invest it because they don't know how to spend it. In fact, when it’s come investments, a lot of people don't know where to invest money. But, after doing their research, they find an option that suits them and their long term savings goals.
The hardest part of saving money is knowing where to start. What can you do today to make a lasting difference further down the line? Turns out, it's actually a lot easier than you first thought. Carry on reading to find out.
Pay Off Existing Debt
If you are currently in short-term debt and actively paying it off each month, then we recommend carrying on until the entire amount is paid off before starting to save. If you can start saving from a clean slate, then it is going to make so much easier for you to save money and even better; more of it.
Start to Record Your Outgoings
The first step for saving money is figuring out how much you spend. Keep track of absolutely everything you spend your money on no matter how big or small it may be. Once you have recorded your outgoings for a short while, organise the numbers by category, such as heating bills, rent and food. And, then total each amount. Use your bank statements to make sure the numbers are as accurate as possible and try not to miss anything.
Budget for Savings
Once you have started recording your outgoings and have a better idea of what you are spending each month, you can begin to organise your expenses into a practical budget. Your budget should clear outlines your expenses and how they measure up to your income. This is so you can plan your spending and limit any overspending. Make sure that your budget factors in expenses that occur regularly but not necessarily every month, such as car maintenance.
Cut Your Spending Where Possible
If you have a lot of expenses which means you can’t save as money as you would like to then its time to start making cutbacks. Identify nonessential items that you can spend much less money on, such as going out for dinner. Look for ways to reduce your fixed monthly expenses as well, such as your TV and mobile phone bill.
Set Your Savings Goals
One of the best ways of saving money is by setting yourself a goal. Start thinking about what you want to save your money for. Then figure out how much money you will need and how long it will take you to reach your goal. If you are saving for a long term goal like your retirement or your child's university fees, then you should consider putting the money into an ISA account where you can earn higher interest than you would using a regular current account.
Automate Your Savings
The majority of banks offer automated transfers between different accounts. You can choose when you want to transfer your money, how much and where to. With some challenger banks like Monzo and Starling, you can set up a feature where when your employer pays you, a certain amount of the money automatically gets transferred to a separate account. This is particularly handy because it reduces the temptation to spend the money without having to think about it.
Watch Your Money Grow
Each month, review your budget to see if you can save even more month and check what progress you have made. Not only will this help you stick to your personal goals, but it also helps to identify where there is an issue or where improvements can be made.