Having an emergency fund can give you peace of mind, especially during tough times, so if you want to stop losing track of your spending and start saving up a generous nest egg, here are the top five money-saving tips.
1) Open an ISA
Opening an ISA, which stands for ‘individual savings account’, is a no-brainer for those who want to easily save money. There are many different types of ISAs, which you can discover on the Wealthify website, but the one thing they have in common is that you can save money tax-free.
One of the most popular ISAs is the Cash ISA. With this savings account, there’s a limit to how much money you can deposit in each tax year – you can ultimately save up to £20,000 tax-free in each tax year. A Stocks and Shares ISA is an investment account where you can choose your investments or pay a fee to have them managed for you. If you’re saving for a deposit to buy a house or saving for retirement, a Lifetime ISA will enable you to receive a 25% bonus from the government if you use your money for these purposes. And, finally, a Junior ISA is a great way for you to save up to £9000 each year for your child.
2) Create a budget
Budgeting is an essential part of saving money. If you always seem to overspend on payday and leave too little money for the rest of the month, then creating a budget could be especially helpful for you.
A simple budgeting trick is the 50/30/20 approach, where you spend 50% of your money on necessities, use 30% for fun purchases and entertainment, and save the remaining 20%. If these ratios aren’t possible for you, then you can always adjust them to reflect your current financial situation.
3) Set aside money each month
Whatever ratio you use for your budget, it’s important to get into the habit of setting aside a particular amount of money each month if possible. This will allow you to steadily build up your savings in a sustainable way. Try moving this money into your savings account right after payday if you’re worried you’ll be tempted to spend it.
4) Stop buying branded products
If money is tight, one of the first (and easiest) changes you could make is buying the supermarket own brand products instead of popular branded ones. Often, the own brand products are just as good, and they’re so much cheaper too! For extra savings, check out the discounted yellow sticker items in your supermarket.
5) Walk more
To help you save a lot more money each month, you should cut out some of your car journeys and replace them with walks. Of course, not every journey can be accomplished without a car, but for shorter trips, you should resist the temptation to take the easy option.
Saving money can be hard, but with the right tips and tricks, you can start seeing a significant increase in the amount you save each month. Try out the ideas in this article to see how much you can save!