5 Easy saving tips to help grow your wealth
Saving doesn't have to be complicated...
Knowing that you want to save money and actually getting started often can feel worlds apart. You know how much money you have, but you just can’t seem to make sense of where to put it, or how much to put aside.
So if you’re wondering, ‘How do I start saving easily and without stress?’ we’ve got some tips to ease your mind and set you on the right track.
How to save: Review your expenses
Before you can take control of your savings, you need to understand your expenses. Figure out how much you have coming in each month (if you’re a freelancer, go with a lower average), then write down your outgoing expenses.
That includes rent or mortgage, utilities, food, and other regular spending. This will give you an idea of how much you have to work with.
Set clear savings goals
Throwing a hundred pounds or so into a savings account each month is fine, and is certainly better than nothing. But having a goal, both in terms of what you’re saving for and how much you need to save, can help you to stay focused and motivated.
If you need £10,000 for a used car, you can easily figure out how much you need to save each month in order to reach that goal.
Understand your spending triggers
Do you spend when you’re bored or stressed? Do you binge buy right after payday? Sometimes we do these things almost without thinking because they’re just bad habits. Take some time to think about how and why you spend, and whether you can channel that energy (and money) into saving for something useful instead.
Save a little each month
The misconception is that there’s no point saving if you don’t already have thousands and thousands ready to go. Saving just £100 a month into a Cash ISA (or a Stocks & Shares ISA) can help you to lock away some tax-free profits.
Throw in the effects of compound interest, and you can build a healthy savings account in just a few years.
Improve your everyday saving habits
These broader categories can help you to understand how to get started with saving. For advice on everyday saving, it’s time to look at your daily habits.
Saving money on groceries
The average UK household now spends approximately £3,601 a year on groceries (this can vary significantly depending on income and family size). Switching brands, taking advantage of store card offers such as Nectar, or planning your meals ahead of time with inspiration from online, can help you to bring down the cost of your grocery bill.
Saving money on bills
Energy tariffs can be incredibly confusing, and realistically, nobody has the time to constantly check and switch. Instead, think about what you can do around the house to lower your consumption.
- Use cold water for laundry
- Wash full loads of laundry and dishes instead of smaller ones
- Lower the thermostat at night or when you’re out of the house
- Unplug appliances when not in use
- Turn off lights and electronics when not in use
- Turn off the heated-dry function on your dishwasher
- Use energy-efficient lighting (i.e. LED light bulbs)
Saving money on takeout food
Of course, this stat is a generalisation, but the average UK household spends over £1,700 on takeout food each year. Cook meals at home instead. Plan ahead if you take your lunch to work, and so that you don’t feel too restricted, allow yourself one night a week for a takeout.
Saving money on taxes
While you can’t avoid taxes completely (at least not legally), you can minimise the tax you pay on the money you have by putting some of your money into a savings account. An ISA is a good way of putting money aside, and doing so will also protect your profits from the tax man.
As you can see, it’s possible to save money even if you’re only putting aside a little each month. But it is an active process that requires some thinking and commitment.