Many people struggle to save money on a month to month basis simply because they don’t have a good money saving strategy implemented. Creating a strategy which works for you can help you to save up some funds to use as a safety net in case you need to make an emergency payment, or to put down a deposit for a car or a house.
Here, we have detailed some of our top money saving strategies to help you create a plan which works for you.
Track your spending
Tracking how much you spend in one month can be a great place to start if you are looking to save some money in the long run. Keeping a written diary or spreadsheet can allow you to see where you spend the most and the least money every month, and how you would like to prioritise your spending going forwards.
You can also look at ways in which to cut your household spending, reducing your outgoings to help you save a little more money each month.
This should also show you how much money you spend unnecessarily, and that potentially you could spend on more worthwhile habits or save.
Create a budget and stick to it
Creating a budget is the next step after you have tracked how much money you typically spend in one month. This way, you can assess how much money is coming into your account and divide it between your expenses.
By budgeting properly, you will be able to avoid needing to borrow any amount of money, which can otherwise end up landing you in debt. For example, if you find yourself needing to borrow $2000, rather than looking to get a loan immediately, you should see where you can reduce your outgoings to reduce the amount you will need to borrow.
It is important to take into account your necessary outgoings such as your rent, petrol costs, bills and food shop as well as saving some money to spend on things you enjoy. After you have assessed this, you can consider how much money you’d have left to save and therefore how much money you could save each year and onwards.
Create a separate bank account
One of the best ways to save money is to put it in a separate bank account which is designed solely for savings. Some banks offer savings accounts which do not come with debit cards attached, so you cannot physically spend the money in the account with a card, and instead you would have to transfer the money into a current account.
Putting a set amount into a savings account every month can help you to get into the habit of saving money, and viewing saving as a necessity as opposed to an option. Having this money set aside every month and put into an account that you cannot easily access leaves you with the option to spend it on something worthwhile such as a house deposit, and leaves you in a more comfortable position if you have an emergency which requires some extra funding.
If you struggle to save money every month, you should see it as an expense to help you prepare for the future and benefit you in the long term. It may be also be possible to put money into an account such as a help to buy ISA, meaning you can only use it to buy property and it will therefore be saved entirely for that purpose.