The double whammy of stagnant wages and rising costs of living has made saving money more difficult than ever for many Britons.
If you want to save money on things that don’t matter and spend it on the things that do, then it’s time to give your finances a spring clean.
Everyone should set aside time to take a hard look at their finances. Spending a few hours now could net you thousands of pounds in the future.
A good money makeover will allow you to maintain your lifestyle — but save you wads of cash just by challenging the odd nasty home truth, taking advantage of the latest deals and learning some new tricks.
Here are six action steps that will help to put more money in your pockets – where it belongs:
- Make a Detailed, Realistic Budget and Stick to It
A budget is at the heart of any savings plan.
Creating a budget will help you find a balance between spending and saving. You can calculate all your regular expenses like rent, electricity, transport and insurance by checking your bank statements, credit card statements, bills and receipts.
You then deduct these expenses from your income. If you’re spending more than you earn, it’s time to make some cuts. Think about the things you need for basic living expenses and the luxuries you could do without.
When you live within your means, tackling other financial goals, such as buying a house, getting out of debt, or saving for retirement becomes more doable. - Save Money in a High-Yield Savings Account
The best way to grow your savings is to start early.
By restricting access to your money in a high-yield savings account, you will enjoy a higher interest rate than a current account.
If you have to transfer money into your savings account manually, you may be tempted to forgo saving altogether. Setting up automatic, scheduled transfers means you won’t see money leaving your current account. What you can’t see, you won’t miss.
You can direct all your discretionary income and windfalls to your primary account to ward off the temptation of dipping into your savings account. - Pay Off Credit Card Debt
Credit cards have a high interest which can eat into your savings.
Paying your credit card on time and in full is a good way to avoid late payment fees and interest charges.
Consider setting up a direct debit payment to avoid missing your repayments.
Instead of plastic, use cash. Handing over physical pounds for your daytime outings or nights out will encourage you to rethink your spending—and may help you spend less. - Control Your Impulses
Online shopping and credit cards have made it easier than ever to spend money. More often than not, we splurge on things we want rather than need.
The goal of most shops is to make you spend as much money as possible. Before you go out shopping, write down a list of what you intend to buy and never shop while hungry.
Another way to short-circuit your impulse is to wait for at least 30 days before making a big-ticket purchase.
Put that item on a wish list somewhere and return after the 30 days are over. If you still want it, go for it! But if you feel like you no longer want it, then congrats! You’ll have saved yourself lots of cash on something you didn’t even really want! - Plan Your Meals
Meal planning is a proven way to stay within budget and save money.
When you know what you’ll eat for the week and shop accordingly, there will be less need to visit the grocery store. Extra visits mean spending more money or even wasting food.
Cooking at home and carrying packed food instead of buying lunch will save you a few pounds each week. - Do a Benefits Check-Up
If you’re claiming benefits, chances are it’s probably been a hot minute since you last checked that you are receiving everything you’re entitled to.
This list of recommended benefit calculators will let you know what you need to have before starting the check-up.
Even if you feel you’re not eligible for more money, it’s worth a try. Who knows? You might be entitled to Tax Credits or Child Benefit.
Conclusion
Knowing what financial lifestyle changes to make is vital if you’re working toward a financial goal.
Lasting financial success takes time, so take it a step at a time.