There are rumours that this will be the tightest Christmas in a long time!
With that in mind we thought it may help to share some tips with you. We appreciate every household is different and at each stage of your life the spending pressures change but hopefully these pointers may help spark some ideas to put you on the right path..
- Create a budget
The first step to saving money is to create a budget. This will help you to track your spending and see where your money is going. Once you know where your money is going, you can start to make changes to save more.
There are a number of different budgeting methods available. One popular method is the 50/30/20 rule. This rule states that you should allocate 50% of your income to needs, 30% to wants, and 20% to saving/investing.
Another popular method is “zero-based budgeting”. With zero-based budgeting, you allocate every pound of your income to a specific category. This method can be more time-consuming, but it can also be more effective.
- Track your spending
Once you have created a budget, you need to track your spending to see how well you are sticking to it. There are a number of different ways to track your spending, such as using a spreadsheet, your banking app, a budgeting app, or a simple notebook.
It is important to track all of your spending, including both big and small purchases. This will help you to get a complete picture of your spending habits.
- Cut back on unnecessary expenses and review your direct debits!
Once you have tracked your spending, you can start to identify areas where you can cut back. This may mean eliminating unnecessary subscriptions, cooking at home more often, or shopping around for better deals on insurance and other services.
Even small cuts can add up to big savings over time. For example, if you save £20 per week on food, you will save over £1,000 per year.
- Automate your savings
One of the best ways to save money is to automate your savings. This means setting up a recurring transfer from your checking account to your savings account each month.
Automating your savings will help you to save money without even thinking about it. It is also a good way to ensure that you are saving consistently each month.
- Set savings goals
Having specific savings goals can help you to stay motivated. When you know what you are saving for, it is easier to make sacrifices and cut back on unnecessary expenses.
Some common savings goals include saving for a down payment on a house, saving for retirement, or saving for a vacation.