The majority of people have to live on some sort of budget, whether they like it or not. But often, saving money is not really on our to-do list.
Nowadays the very idea of ‘saving’ or having ‘savings’ is seen by most of us as a luxury.
It’s a slightly alien concept which applies only to the super-rich or grannies who eat baked beans by candlelight while having thousands of pounds stuffed in a suitcase under the bed.
Basically, if you haven’t got any money, you can’t save any money, right? It’s wired into our DNA that when we have only a little money we need to spend it all on, you know, staying alive, and the savings account can go jump.
However, even the most miniscule attempts at saving can add up in the long run.
Not to quote a massive, billionaire retailer but every little really does count. And with dwindling pensions, tuition fees and high living costs, saving a little has never been more important.
So we need to change our psychology around saving.
Despite awful savings rates and paltry attempts by the powers that be to encourage people to save, there are little changes that you can make to add to a savings pot (or eggcup!) even if you are on the tightest of tight budgets with our smart tips for saving money.
But before you go off and slash your bills or flog your stuff, remember the golden rule: Any extra money you can claw back – put it in a savings account.Any extra money you can claw back – put it in a savings account. Click To Tweet
Stick to this habit and you could end up quite flush by the end of the year…
Smart Tips for Saving Money on a Tight Budget
1. Get to Grips with Your Finances
Create a budget and then you will see exactly where you can cut costs and add to that all-important savings pot, however small. Check out our article on how to budget or use a budget planner to help you.
Then, open a savings account with the best rate of interest you can find.
2. Cut Some Luxuries
We can’t live like monks but if you cut even one daily or monthly luxury and put that money into your savings account instead, you’ll be surprised at how much it can add up. Here are some examples:
- Takeaway cappuccino: £2.25 per day, adding up to £11.25 per working week. Cost of a coffee brewed at home and put in a travel mug: £0.06p per day.
- Shop-bought lunch: £4.55 per day, adding up to a whopping £22.75 per working week. Average cost of a homemade packed lunch: £1.50 per day.
- Gym membership: £50 to £100 per month. Cost of walking, jogging, cycling near where you live or doing online at-home exercise videos: Free.
- Nightly glass of wine: £2.60 per night. Don’t panic! We aren’t telling you to give up wine (see monk comment above). But cutting it out just three nights a week could save you £7.80.
Doesn’t sound like much but put that it a savings account and you could have over £400 by the end of the year….
Related: 7 Easy Ways to Save MoneyEven the most miniscule attempts at saving can add up in the long run.Click To Tweet
3. Start a Savings Jar
Having a piggy bank might seem a bit more in keeping with a five-year-old’s outlook on money, but the average household can have a massive £530 hanging around in small change.
Put any spare change you find into a savings jar. This sounds really easy, but it isn’t as easy as it sounds – it takes a lot of discipline and determination to put any spare change you find into a savings jar on a regular basis.
You can even give yourself a theme to make it bit more interesting, such as a ‘£2 Coin Pot’.
Whenever you come across a £2 coin (rarer than £1 coins), put it in your £2 Pot. Carry on like this for a year and you could have over £350 saved…. You can check out Amazon for a saving jar to get you started.
Related: How to save money without breaking a sweat.Putting spare change into a savings jar sounds really easy, but it isn't as easy as it sounds. Click To Tweet
4. Switch it Up
It’s an old one but switching energy/TV/phone suppliers has never been easier. You can switch using comparison sites such as the moneysupermarket.
Switch everything and any money you save from your old direct debit to your new one – redirect to a savings account.
It only takes 20 minutes to switch and you could save up to £200 over a year for 20 minutes work.
5. Check Your Direct Debits
Many of us have direct debits and standing orders that we didn’t know we had.
The main offenders are for magazine subscriptions, insurance for white goods or other items you may not have any more and rolling gym or club subscriptions.
Take a good look at your payments then cancel everything you are paying for that you don’t need or use.
Again, re-direct that amount – however small – to your savings account. If you didn’t notice it leaving your account before, you won’t notice it plumping up your savings….
6. Save Your Windfalls
Millions of people overpay on tax. This might be down to human error or that you have simply been put on the wrong tax code – so you may be due for a substantial rebate (you can check if you are paying the right amount by using the HM Revenue and Tax Checker here).
Or perhaps you’ve had a refund from being mis-sold Payment Protection Insurance or received some inheritance.
It may be tempting to splash this cash but by putting it into your savings, you’ll build an even bigger pot for the future.
7. Take on 52 week Money Saving Challenge
If you are brave enough, why not why not set yourself a challenge.
Set aside £1 on Monday, £2 on Tuesday, £3 on Wednesday, and so on up to £7 on Sunday and start over again the following week. Keep on like this for a year and you could have nearly £1,500 saved.
A simple hack to help you save more money
If you’re struggling to free up cash to save, here is a simple way to reduce your spending without feeling like you’re missing out: trim your budget.
One of my favourite ways is called the 5% Rule. This is where you go through your budget and cut all of your variable or discretionary categories by 5%.
For example, instead of budgeting £200 for eating out, you reduce it to £190 and put the extra £10 towards debt or savings or investments.
£10 may not seem like a lot money, but what if you applied it over multiple categories?
- Groceries: £300 you get £285 = £15
- Entertainment: £150 you get £142.50 = £7.50 saved
- Clothing: £100 you get £95 = £5 saved
- Fun money: £200 to get £190 = £10 saved
- Restaurants: £200 you get £190 = £10 saved
Just making these simple cuts can save you almost £50 each month. The best part is these cuts aren’t drastic and most people don’t even notice the difference.
Want to Save More Money This YEAR!?
If you’re looking to save more money and achieve your financial goals quicker, our Financial Success Planner is great place to start!
Are you living on a tight budget but have still managed to save? How do you do it? Share your tricks and tips for saving money with us, we’d love to hear from you…
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