By Lyndsey Hall
These days, trying to make your money last until the end of the month can be tricky. We’re constantly told to make sure we’re putting money aside for a rainy day, but after bills, rent, living costs and maintaining a social life, there’s often not much left. However, no matter your income or your outgoings, it’s always possible to turn your financial situation around and start building that rainy day fund. All it takes is a little inspiration and organisation.
So, you’ve decided you need to start taking control of your spending. First things first, you need to track your monthly expenditure. It’s important to know exactly what’s going out of your account, when, and on what – you’ll be amazed by just how much the little things can add up. It also helps to categorise your spending so you know which category is taking the biggest chunk out of your paycheque each month. By doing this, you’ll be able to see where you can cut down on unnecessary expenses and make savings.
Apps like Cleo, Mint and Wally allow you to view your accounts at a glance, notify you when a bill goes out, and even help you improve your credit rating for those all-important major purchases further down the line.
Pay yourself first
One of the biggest mistakes people often make is that they only think about saving money at the end of the month once their expenses are paid, making the temptation to treat yourself with the spare cash overwhelming. Ideally you should include your savings in your monthly expenses, thinking about them in the same way that you think about paying your bills. You can do this by having a certain amount of your paycheque automatically moved into your savings by Standing Order. 10% is a nice number to aim for, but start off small if that amount sounds too daunting.
By taking the automatic route, the money is gone before you notice it, meaning it’s no longer ‘spare money’ to be spent frivolously, it’s your nest egg.
Budgeting can be a pain, but it’s the best way to avoid any uncertainty around your spending. These days, it’s never been so easy to live on a budget, there are loads of apps out there designed to keep you on track. Check out this list by Which? or you can keep a good, old-fashioned spreadsheet, if that’s more your style. Save it in your Google Docs or other cloud storage so you can access it from any device, anywhere, and always keep your budget up to date.
Prefer a low-tech version of budgeting? Why not withdraw your disposable income each month and divide it into envelopes? Write on the front of the envelopes each thing you need the cash for this month, e.g. one for food shopping, another for fuel/bus fare, or birthday gifts, etc. Leave yourself a few quid for miscellaneous costs if you can, even if that’s just a coffee with a friend. If you have any left over, put it in a jar and after a few months you might even have enough cash saved to treat yourself!
Just make sure your real savings are going straight from your current account into a savings account with a nice interest rate as soon as you’re paid each month, so you know you’re prepared for a rainy day and can really enjoy that treat, guilt-free!
Many of us stick with what we know when it comes to our suppliers, worried about incurring cancellation fees and getting talked into two-year contracts on products we don’t want by silver-tongued salesmen. But thanks to the current account switching service and the dozens of comparison sites ranging from car insurance to credit cards, it’s never been so easy to switch and ensure you’re getting the best deal.
Citizens Advice, Ofgem and Money Saving Expert are just a few of the organisations that recommend shopping around for the best deal when it comes to utilities, and never letting a contract auto-renew. Citizens Advice have previously submitted a super-complaint against utility companies effectively penalising loyal customers for staying with the same supplier, as an investigation revealed consumers were being ripped off to the tune of £4.1 billion on their mobile, broadband, home insurance, savings and mortgage bills.
The last super-complaint (against PPI in 2005) resulted in more than £30 billion being returned to customers, but that doesn’t necessarily mean the same will happen again, so it’s best to keep an eye on your contracts and make sure to compare prices when your renewal date approaches.
Set a reminder on your phone’s calendar so you never miss the chance to switch and save.
From car insurance to train tickets, holidays and fuel, prices seem to go in only one direction these days – up. However, there are a few simple way to cut back on your travel costs.
The cost of parking can be a major expense for anyone commuting into a city or trying to park near a popular event. Websites like Your Parking Space or Park on my Drive can help you save on those costly car parks.
For longer journeys, instead of booking your journey on one ticket it’s often cheaper to buy a series of tickets. This is called split-ticketing and can cut the price of travel significantly. Websites like Train Splitting and Money Saving Expert can help you cut the costs of your tickets.
You can often halve the cost of your daily commute by car sharing with a colleague, and many companies even provide a workplace scheme to encourage it.
To save on petrol, websites like Petrol Prices can help you find the cheapest fuel near you. Just make sure the journey to the cheapest pump doesn’t cost you too much!
As well as finding the cheapest fuel, you can save money just by using less of it. Simple tips like driving more efficiently by changing gear sooner, avoiding sitting in traffic, checking your tyre pressure and removing unnecessary weight from the boot can help reduce the amount of petrol you burn.
Before booking your flight, be sure to delete cookies from your computer beforehand. Often, websites can tell if you’ve visited them before and will push up the prices of flights with each visit.
You should also make use of websites like Skyscanner and Cheapflights when looking to book your next trip. You can even set up an alert so the website emails you when flight prices drop.
It’s unrealistic to tell yourself to live without the occasional treat now and then, you deserve to spend at least some of the money you earn on yourself. Ellie Thompson, CEO of financial consulting firm Money Therapy, suggests 30% of your income should go towards guilt-free spending. It’s important to sit down with your budget and determine what items or services make you happy. Once you eliminate those purchases you feel so-so about, like your morning coffee or afternoon chocolate bar, you have a buffer of income that can go towards what truly brings you joy.
It’s not just short-term pleasure that’s important though, so put some money aside for something more expensive and extravagant later on. Future you will thank you for it!
Saving and budgeting can seem like a necessary evil, so be sure to treat yourself when you deserve it.
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