Tips to help you save
It is always a good idea to start saving. Having a healthy savings fund will provide you with the stability to make long-term investments (such as a deposit on a house), plan for retirement and reduce the likelihood of spiralling into debt. It is recommended that you save a minimum of 10% of your pre-tax earnings each month. To successfully do this you will need to create a financial budget. The budget takes into account your monthly salary and will deduct from that your monthly bills (e.g. housing expense, electricity, gas etc.). The amount left is your ‘disposable income’ and it is from this fund that you need to make sure you save a certain percentage each month. If needed, give yourself an allowance each month and remember that once the allowance is gone, it is gone – you cannot dip into the savings for extra cash.
Below we have outlined some day-to-day ways that could help you reduce your monthly costs and free up more money to be saved away.
Reduce Bank Costs
- Avoid using ATM machines outside of your banking network, as you will incur a fee.
- Review your account type to make sure it best suits your needs and you are not paying for unwanted services.
- Set up direct debits to pay your bills automatically so that if you forget a bill from time to time you will not be charged a late fee.
- Remember to review your car insurance every year to make sure you are getting the best deal. Your car value will depreciate each year and this will determine the premiums you are paying, so make sure to update the information.
Reduce Household food expense
- Try to buy only what you need for the week. It is all too easy when shopping to buy more than is necessary, with the food only going to waste when it is not eaten.
- Buy in bulk – single packs cost a lot more (per pack) than the multipacks. This also is true for meat. You can always buy in bulk and freeze what you do not need immediately.
- Grow your own – It is cost effective to grow your own vegetables if you have the room, instead of buying.
- Plan your meals and take food for lunch each day. Cooking your own food instead of buying food whilst you’re out will reduce your weekly expenses considerably.
- Always shops around and compare prices to make sure you are getting the best deal. This is especially true (and easier) when shopping online.
- Did you know that downgrading the brand you buy could reduce the amount you spend as much as a 30%?
- It is a good idea to know when sales are coming to buy things you need, but don’t buy things simply because they are on sale. Remember that any added expense is still an added expense.
- Try to plan your shopping before you go by making a list. Not being prepared can lead to impulse buys that are rarely needed.
Reduce your electricity bill
- Switch off your TV and lights when they are not being used.
- Try to use energy efficient products such as light bulbs.
- Use your washing machine on a cold cycle and dry your clothes outside rather than using a tumble dryer.
Reduce Car Expenses
- Keeping your tyres correctly inflated will not only ensure they last longer but will mean your car is more efficient on fuel, reducing your petrol costs each month.
Finally, it is always tempting to spend your extra money, especially when you receive your paycheck and see the money in your account. As a useful way to begin saving, set up a new savings account and automatically remove the money from your paycheck each month through a direct debit. This will keep your savings out of sight and out of mind, allowing you to successfully increase your savings over time.