Saving money is a real challenge. You set many financial goals, such as buying a house, car, and stashing away money for retirement. All goals involve the most common effort, which is setting aside money. Unfortunately, this is what many people find hard.
It is not as simple as it seems. It is not about choosing a random number and starting outing by as and when you need. You will have to carefully track your expenses to know how much you can actually set aside, what your goals are, and how you will align your savings to your goals.
A report has disclosed that the Brits want to save money for a variety of purposes, such as emergencies, vacations, buying a car and a home, but barriers get in their way. 40% participants blamed increased expenses, 30% held unexpected expenses responsible, and 19% pointed to reduced household income. Well, building savings is still possible.
Proven ways to speed up your savings
Here are some of the crucial ways to increase your savings amount:
- Create a budget
Whether you accept it or not, budgeting paves the way for saving money. Unless you know how much you are spending, you cannot know if you are reaching your goals. Various budgeting methods are out there, but the most popular one is 50/30/20.
It means you should spend half pay on essential expenses, 30% of it on discretionary expenses and 20% on emergency needs. As soon as you receive your pay, you should pay yourself first.
- Track spending
You should note down every tiny expenditure in your journal, so you know how much you are spending and where. If it is not possible to record all expenses manually, use a budgeting app. Link it to your bank account and pay using a debit card.
All transactions will automatically be recorded in one place. It also helps categorise expenses, so you know which category exhausts the highest proportion of your salary.
- Set goals
You should set a combination of small and large goals. Start with smaller goals. Celebrate success as you make progress to keep yourself motivated. Before you aim at any goal, make sure you are free from any outstanding debt obligations.
If you have outstanding instalment loans online, you should settle them first before thinking about anything else.
- Refinance your mortgage
Refinancing can help you avail yourself of lower interest rates. As you are closer to the end of the fixed interest-rate period deal, you should research the market to explore your options. By the time your credit history has improved. This will enable you to refinance your mortgage at a cheaper interest rate.
- Shop grocery mindfully
A little caution during grocery shopping can save you some money. Check a cellar and refrigerator to ensure you do not buy what you already have. Find out if there is any store in the neighbourhood offering you the same commodities at lower prices. Use coupons and special schemes to save extra bucks.
- Reduce your TV and broadband bills
You often do not pay heed to your TV, mobile and internet bills. Disconnect the cable connection if you watch OTT platforms. Do not sign up for all OTT platforms if you watch only one or two.
Check if you are eligible for a cheaper mobile plan. If you have been a very old customer, you can request your service provider to grant you some concession. If you do not consume the whole mobile data you get, you should switch to a less expensive internet plan.
- Whittle down your energy bills
Energy bills exhaust a large portion of your money. It can be hard to cut back on them in cold weather, but there are still some ways to do so. Insulate your house. Hire an expert for proper insulation. Cracks and crevices should also be sealed.
Put on additional layers, so you can avoid keeping the heating system turned on throughout the day. In the summer season, you should avoid using a tumble dryer. Instead, hang clothes on a clothesline.
- Cancel unnecessary subscription
You might have been paying for what you do not use at all. Review your bank statements carefully to check if there are any recurring expenses. Apart from OTT subscriptions, many people subscribe to magazines and newspapers. Magazine subscription is worthless.
It is a complete waste of money. As far as you are concerned about being updated about what is happening in the world, you can use digital platforms rather than newspapers. The BBC, The Guardian provide news through their websites too. Download an app and stay updated. Apart from subscriptions, if you find any other recurring expense that you think should be avoided, cut that down.
- Plan major purchases
While purchasing appliances, furniture or any other big item, you should carefully plan your budget. As you cannot wait until you have enough budget, it does not make sense to take out a loan to bridge the gap.
Compare prices because you will most likely find large items at lower prices online. Avoid shopping for furniture during the festive season because you will most likely find double the prices despite them being on sale.
- Delay impulsive purchases
Many people fail to resist impulsive purchases. When you feel an urge to buy something, you should not immediately rush to the store. You should rather wait for at least two days, or you can wait for a week, and in the meantime, make a list of things you want to buy.
After the end of a week, when you visit again to the list again, you will most likely feel that you are no longer keen to buy them.
The final word
Saving can seem difficult, but it is not. You should try to set goals and a strategy to achieve them. Track your expenses and see where you can cut back on them. Create a budget and stick to it.
