Saving money can be difficult, particularly when life can be as expensive at it is – and especially now, when emotions are high and things aren’t as they usually are. The temptation to spend the last £50 in your bank balance a few days before pay day, when you’re feeling sad and in need of TLC, is definitely high. We’re on a mighty mission to save, save, save for multiple things at the moment, but our main ‘savings pot’ is for a new house.
I sat down and thought about some good saving habits that we have developed over the last few months. Being in lockdown and working from home definitely helps with our savings – we’re not having to pay for the train into Leeds at the moment which is saving us a massive chunk each month. I’m also saving a fortune through not buying drinks and snacks during the day – the lull of McDonalds and KFC was too much for me to handle when I had one within jumping distance of my company’s office building. Want some tips on how to save money? Read on.
How to Save Money and Get back in Control
Stop being afraid of your bank balance
I used to HATE checking my bank balance – it made me feel depressed, it made me anxious and to be honest, it encouraged bad spending habits rather than the saving habits I’ve recently instilled. Get into a habit of checking your bank balance at least every other day so you know exactly what transactions are due to go out, if you’ve received any incomings that you hadn’t previously accounted for and to check your disposable income for the week or the rest of the month, depending on how you’re making your calculations. I know exactly how much money I have in my account that isn’t dedicated to bills and I know whether I can afford that little end of the month purchase – usually on a book I’ve been eyeing up!
Put your savings into your account at the start of the month, rather than the end of the month
I have a fixed rate ISA for my savings – it can be accessed as and when I need it, but not immediately, like my previous bank account’s savings account. This means that there’s a self-imposed cooling off period if I want to make a purchase that requires dipping into my savings – I have the chance to think about whether I actually need the item I’m wanting to buy or whether I just want it. I can also consider whether it’s value for money. I have a standing order for a monthly lump sum that goes from my current account to my savings account – I then split the savings amount between my different savings pots. I currently have a pot for our new house, a pot for Christmas (I’ve calculated a budget for each person I’ll be buying for and have worked out exactly how much I’ll be spending on each of them – no exceptions and no overspending!) and also our holiday pot for 2021. We save our spending money in advance of the holiday so we can go and know that we won’t have to scrimp or deny ourselves that extra cocktail. Our flights and accommodation are already sorted so having a pot for our spends means that we’ll have the best holiday we can imagine – assuming COVID lets us go by then!
I’ve found that getting my money organised and separated into the different pots as soon as my salary hits my bank account means that I can see those numbers rising each month. Any money I have left over at the end of the month – and sometimes even mid-way through the month if I find I have more money that I’d anticipated- also gets moved into my savings pots. Which leads onto…
Calculate your disposable income each month and ensure you stick to the budget you set
Every month, you’ll likely have bills and payments that go out of your bank account as standard. Understanding these bills is important – you need to know exactly how much is going to come out of your account, before you have money for entertainment and leisure. I include my monthly rent (or a mortgage, if you own your home), our utility bills including the internet, my phone bill, my emergency credit card monthly payment and then any direct debits and subscriptions that leave my account. I also include the amount I want to save as a minimum each month and our monthly food bill – we (my partner and I) each put £120 into a separate account and this covers our weekly food bill, drinks, meals out and activities that we do together each month, as well as paying for our cats food and litter. It also means we have money for any bits that we need for around the house too – such as cleaning products, laundry detergent and other things that just one of us shouldn’t have to pay for. Any payments outside of this, I log on my weekly outgoings tracker so I know exactly where my money is going and I can up my savings if my outgoings are lesser, making it much easier to save money.
Any money I have left over for the month after I’ve deducted all the above from my salary (and Richard’s half of the bills and rent) is my disposable income – I divide this into days and give myself a daily budget. If I don’t spend the daily budget, it either carries forward to the next day or else is put straight into a savings pot – this depends on what I’ve got coming up in the week though! It means that I don’t overspend early on in the month and find myself withdrawing from my savings later on in the month. If you budget well and own your expenditure, you’ll find its not at all difficult to save money.
Know exactly when your bills will leave your account – and look into if you can make them any cheaper!
With that said, it’s important to know exactly when you’re due to have your bills leave your account. I made a note of when every bill will go out, so when I’m checking my balance I know that I still have balances to subtract from the amount in my account. This means I’m not hit by surprise by a bill I forgot was due to go out and end up with less money for the things still to come. Surprise bills mean less opportunities to save money.
It’s also a good option to try and see where you can make savings – by this, I mean using comparison websites to get the best deals for insurance and the like. I’ve calculated that when my home insurance policy is up in a few months, I’ll be able to save around £12 a month by using a different provider – without sacrificing any of the benefits. £12 a month might not seem like a lot in the grand scheme of things, but over a year it’s an extra £144 in your savings. If you manage to save a small amount on different insurance policies, switching to different utilities providers and so on, you’ll soon see the rewards in your savings.
Create a spreadsheet to track your saving (and your spending!)
I am an absolute advocate for spreadsheets – until recently, I had one for every aspect of my life (more on that shortly. Finding a decent financial tracker (I used to use Rhianna’s financial tracker) is key to getting in control of your finances – no one can expect to be able to organise themselves and their money matters just by remembering everything and thinking about it. You need to write it down and make a literal, rather than mental, note of everything that you’ll be paying out and the monies coming in as well. I had a VERY detailed finance tracker that logged my outgoings, my incomings, my savings pots, ad-hoc payments made and other savings. I looked at ways I could reduce my bills (as advised above) and logged these – I made the decision this month to cancel my phone contract too – it’s up in the middle of October and I pay a ridiculous £43 a month for my phone. The phone hasn’t got a thing wrong with it, does all that I need and looks brand new, even after two years, so I won’t be upgrading. I’ll simply be buying a pay monthly sim with enough data to cover me – around £15 and saving £28 a month on average.
Whilst my spreadsheets definitely do work for me, I have a lot of them for different areas of my life and it was getting a bit overwhelming keeping on top of them. I’ve seen multiple people on YouTube going on about a site called Notion so I decided to download it today and see what it’s all about – I was able to consolidate all of the different trackers that I use daily into one place – it’s very easy to navigate once you’ve got your head around it and a lot of the steps I was having to take to update the trackers have been reduced. I highly recommend so far if you want to incorporate your finances tracker into a daily to-do list tracker. Attached above is my ‘homepage’ for my finances trackers – with the more obnoxious amounts including my earnings and our house savings goals blacked out. I’ve also blacked out Christmas present amounts as all the people mentioned read my blog and will likely have things to say! I’ve left the Ibiza savings pot to use as an example as I’m not too fussed about the intimate details about that one – the holiday is in May and we have tried to budget 100 euros each day for food and drinks for 2. You can see that the amount was reduced in June as that was when we booked the flights – but we are well on track to have the £600/700€ by May, with 9 months left to save.
Getting a head start on your finances can only be at a benefit to yourself – it will allow you to save in ways which you may previously not have thought possible, as well as give you a visual representation of the hard work you’re putting in and the sacrifices you’re making to get there. There’s no standard answer as how to save money best, but taking advantage of these five easy steps will definitely get you started!