I often get asked how I save, or saved as buying a home required saving for years.
So I thought I’d share tips which I’d give to those who want to manage their money better. Saving money is something I think we’d all like to be able to do, but just doesn’t happen as often as we’d like.
We start to live to our means, rather than attempting to make our finances lean & release more disposable cash that can be saved for our future or big events.
I have shared 5 tips below on how to manage your spending & to get saving.
Look at your Income and out-goings
Often, we’ll get very carried away in our spending and give in to what we want to spend our money on. It’s a thing. But if you’re wanting to save, you need to take control of those urges, self-discipline is a skill set you’ll need here. Of course if you don’t feel you can, or want to give up anything, you’ll find it much harder to save.
You can’t have everything at once, but you can have everything eventually. You’ve just got to commit.
You have to be sensible. Print off your monthly bank statements and go through the bills you are paying for every month. Look at the things you have to pay, such as a mortgage or rent, water, electricity, gas, council tax. These costs are generally unchangeable and will come under ‘money that has to be spent’, not ‘disposable income’.
Cut back on bills that you don’t really need
Once you’ve looked at where money is being spent, you can start to tackle the problem of wasting money on things you like, but don’t need.
Sky is great, we all love good TV.
That car is so pretty and I do need a car – but do I need one that costs £200/month on top of everything else?
That £700 sofa is beautiful, but we already have sofas…
That takeaway; do you really need it or are you being frivolous?
You can have all the things above, but do they need to be as expensive as they are? Can you wait and save for them? Are they necessary?
A takeaway or two a month is nice, and can feel like a huge treat when you’ve been working your butt off. But do you need to spend £20, or could you just have what you need from the takeaway and spend half of that?
I’m not talking here to the people who don’t spend anything on themselves, then feel bad about a £10 takeaway. You are absolutely allowed to treat yourself, just try and manage how much it’s costing, if you want to save more.
You can treat yourself in other ways, it doesn’t have to cost. Going for a walk doesn’t cost, getting yourself a £2 takeaway coffee is a small cost if you’d like to treat yourself.
Try & save at least 20% of your disposable income
This is my most important tip, because saving can just seem so far away from possible when you have expensive things going on. But you can always save something.
Even if it’s £20, it’s £20 more than you had saved up before, and if you saved £20 every month, within 6 months you’ll find £120 might come in very handy for a deposit for a holiday, or that bike your child wants for their birthday that you could never afford before.
Make the 20% a bill. It is a bill, it’s a bill to your future self, to help yourself out when money may be tighter in the future, or when you need to pay for your child’s school trip at the last minute.
If 20% is just ridiculous to you, then just save 5%, or just £10 a month. Or you need to save more to get something you need, then amend this tip accordingly. When we were saving for our first home, we were putting 90% of our income into savings to ensure we had it ready for the time-scale we gave ourselves (this is also thanks to a very accommodating mother & father – she loves a shout-out on the blog!).
It’s all down to what you want, the help in place, and how long you have before you’ll need to pay it.
Find out your disposable income after all this & get used to it
This is the hardest thing to do.
You look at your income and automatically think ‘oh, this month I’ll have this much!’ But what actually should be happening, is you remove the 20% of the savings before you consider what you’ll have left.
Make the 20% a bill, for your future self, as i say above, then whatever is left, is what you have for cinema/pub/drinks with friends/coffee with friends.
I would advise saving a few £100’s to ensure you are saving well but this isn’t a possibility for every-one, and there’s a lot to be said for the small savings and focusing on the things money can’t buy.
Make a budget plan for the months ahead
Give yourself an amount that you’ll have to spend that month. Could be half of what you have disposable, could be most of it, could be all of it. I then make plans accordingly. I say no to things that will cost too much, or I don’t feel are a priority for me to do as I’m prioritising saving.
I consider going out for a meal and drinks as £30-40 and if planned, take that off my disposable amount. I’m not saying I won’t do anything spontaneous or spend spontaneously but I’ll certainly prioritise my want to save, over my want of the makeup/shoes/anything that isn’t necessary.
I find this really helps me. Get Microsoft Excel involved if you’re technical, and if you’re not, get a pad and paper. Seeing the costs all broken down and how I’m managing my money, using Excel, helps me edit and amend the budget as necessary.
For example, saving for a holiday or a big event might require you to save £50 a month, which you budget as over 6 months.
Then each month, the satisfaction of crossing off another month can make you feel very successful and is a boost for saving more.
I find when I have money saved I always feel much better. Hope these tips help you to feel better about your budgeting.
Happy saving! Let me know if you’d like more posts on finances 🙂