Tried-and-tested ways to save money
With the cost of living and dying both increasing, saving may sometimes seem impossible. The good news is you don’t need a big income to start your savings goals. Here are our top 10 money saving tips that have been proven to work.
1. Change your mindset
Successful savers realise that saving money is about priorities and planning ahead. Beverley of the blog Pack Your Passport, who saved more than £2,000 in just 6 months to go travelling to Australia, had a clear savings goal which motivated her to save. Would you like to afford a new car or your child’s wedding? With a goal, you’ll understand that every pound saved adds to your savings for that wedding dress or a new car.
2. Make changes to your lifestyle
Reaching your money-saving goal will involve changing some habits. Small changes can make a big difference over time. Ian and Rebekah Pugh managed to save £900 a year on food bills by setting a limited shopping budget and shopping at local stores instead of supermarkets.
3. Start as early as possible
Many successful savers learn to save at a young age. Jen Walshaw from the blog Mum in the Mad House encourages her children to save by paying interest on what they have already saved during the month. This is a great way of keeping children motivated to continue saving more money. It’s important to teach children the benefits of saving money. After all, the sooner you start, the more you can save.
4. Consider own-brand goods
Supermarkets these days offer some good value own-brand products, which can save you more than buying essentially the same product from a well-known brand at a higher price.
5. Weigh up your savings options
The first option many people think of for saving money is in a savings account with a bank or building society. Whilst this is good, there are other choices that could be more suited to you. A NISA (New Individual Savings Account) protects your savings from taxes incurred with regular savings accounts.
6. Keep track of your spending
You need to know how much you’re spending before you can decide on how much you should save. Cass, writer for the blog Frugal Family cites this as a top tip, try her downloadable budget planner. Another popular blogger, Frugal Frank, recommends recording all of your expenses, no matter how big or small they may be. Many people spend a great deal more than they realise, so recording all your expenses will help you work out where you can cut back.
7. Find ways to cut back on expenses
Expenses can be categorised as fixed and variable. Fixed expenses stay the same every month, e.g. rent, insurance, mobile phone plan. Variables include money spent on food, petrol, clothing, entertainment, etc. The challenge is choosing which expenses you can drastically reduce. Do you really need Sky TV? Can you and a colleague share the commute to work and cut petrol costs?
8. Clearing your smallest debt can encourage you to save
According to the money and debt blog, Johnnydebt.co.uk, staying motivated is key to successful saving. For example paying off your smallest debt can be beneficial in the long run. To have one debt cleared, no matter how small it may have been, can encourage you to keep on saving to pay off other larger debts. It all comes back to the psychology of saving.
9. Automatically add to your savings
Deduct a certain amount from your salary every month to put into savings. You can take things one step further by setting up an automatic transfer to ensure the amount goes into your savings account the day after every pay day.
10. Pay off your debts as soon as possible
A top tip from Rob Dab, a finance writer for the Debt Advice Blog is to try and pay off more than the minimum amount each month. If you save £5 on your weekly shopping bill, then why not use the money you saved towards making a higher repayment for that month? Making small changes like this will help your clear you debt faster.
SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, life insurance, equity release, pet insurance, home insurance, car insurance, ISAs and Will writing services.