New year’s resolutions.
Many of us make them, but how many of us actually stick to them?
It seems that we often set ourselves up to fail with new year’s resolutions that are unrealistic and unachievable (a bit like our targets in work!). As a result, we become demotivated and lose sight of our goals. But this doesn’t have to be the case.
If we break our resolutions down into bite-size chunks, they’re not always as unobtainable as they first seem. It is the small steps and everyday changes that collectively make the biggest difference. So, do yourself a favour and simplify your goals. Take them one step at a time – if you break your goal down into its component parts, rather than trying to tackle it all in one go, you are more likely to stick to your new year’s resolution because you are setting yourself up for success.
In this blog, I’m going to focus on a new year’s resolution that resonates with many of us – saving money in 2020. Perhaps you’re saving up to buy a house, to travel more, to allow you to reduce your hours in work, or simply to decrease your spending if you’ve been living beyond your means. There are lots of reasons why we might want to save a few pennies, but sometimes our goals just feel too big to tackle.
So here are my favourite tips for saving money in 2020, with some simple ideas that you can build into your everyday routine…
The cash challenge
It has become far too quick and easy to spend money without even thinking about it. Simply tap your card, phone or smartwatch on the till and you’ve paid for something without even handling any money.
I don’t know about you, but I rarely carry cash these days and I nearly always pay for things on my card. It’s convenient and fast. But if you’re watching your spend, using cash is a great way of monitoring your outgoings and making you more aware of what you’re spending.
When I’m saving towards something specific (like a holiday), I like to set myself a weekly cash challenge. I withdraw a set amount of cash at the start of the week and try to spend only that, and avoid using my card to make payments. It makes me far more mindful of what I’m spending, but also far more careful not to waste money on unnecessary items that I can do without.
It is now easier than ever to keep track of your expenditure at any time and from anywhere, with mobile banking at your fingertips. Download the app for your bank and get stuck in. I feel that it is safe and secure, using my fingerprint to log in.
Once you have the app, you can then use your phone to check your bank balance, transfer money and make payments directly from the app. You can even open a savings account and set up standing orders to put money aside each month, at the touch of a button. I find mobile banking the simplest way of managing my money every day.
Set up a savings account
As I just mentioned, opening a savings account is easy-peasy. I’d recommend having a savings account that is separate to your current account, so that you can put money aside and separate it from your working budget. If money sits in your current account, you’re more likely to see it and want to spend it. But putting it away in a separate account limits that temptation.
You can often even name your savings accounts. So, I like to name mine according to whatever I’m saving up for, such as ‘holiday fund’. This gives me that little extra motivation to keep topping it up and it becomes addictive. When you see the figures growing, you’ll want to keep it going up more and more.
Keep a spreadsheet
For as long as I can remember, my mum has always kept a record of income and expenditure. She regularly gets her expenses book out and makes notes of outgoings and receipts, so that she can keep tabs on the bank balance. By doing this, she worked out what we could afford to splash out on throughout the month, or how much we could put away into savings for another day. It is a very healthy habit to form, especially if money management isn’t your strong point.
I’m not as good as my mum at keeping records like this, but if you need to track your spending habits a little more closely, you could set up a simple excel spreadsheet that you can access on your phone to keep it updated in real-time. It helps you to identify if your outgoings are greater than your income and you’ll learn to balance it out.
Set up a standing order
When payday arrives, I feel rich as a king and ready to spend money frivolously and treat myself. But towards the end of the month, things are usually not looking so rosy and I’m far more careful about what I spend.
I find that saving money via a standing order right at the start of the month (as soon as I get paid) means that I’m more careful about my spending throughout the rest of the month. By limiting my bank balance in this way, I’m not only able to prioritise saving money, but I can also budget better and make my remaining pay go further.
To ensure I do this consistently, I’ve set up a standing order to move money directly into my savings automatically after payday. If I find myself running low on cash later in the month, I’ve always got the option of transferring money back into my current account, but this is usually a last resort and I’ll try all the other tricks in my arsenal before I resort to that.
Whether you get paid weekly or monthly, budgeting is crucial if you want to start saving money. If you know how much you get paid and how much your average monthly bills cost, budgeting is easy. Simply deduct your regular outgoings from your income, and divide whatever is left by the number of days in the month or week. This way, you know what money you’ve got left to spend every day after you have paid all your bills.
Sometimes, it is useful to be aware of the daily amount of money in your pocket so that you know if you can afford to treat yourself for lunch, but it also helps you to know where you need to cut back and make savings. Even just cutting back on your daily Starbucks gives you a few extra pounds that can be stowed away each day. It all adds up in the long run.
I think this is the area that people struggle with the most. No one wants to cut out all the little luxuries in life and live like a pauper, but cutting back on a few unnecessary extras can save you a surprising amount of money. I often wonder how my friends can afford all their added extras, but I happily manage without them and don’t feel like I’m missing out. A few ideas include:
Your gym membership – are you actually using it? Are you getting your moneys worth? Can you find a cheaper alternative? Have you tried exercising outdoors instead? (it costs nothing and the fresh air will do you a world of good!) If you’re not making the most of your gym membership, why are you still paying for it every month?!
Netflix, Now TV, Amazon Prime, Spotify, Apple Music and other subscriptions – they may only cost a few pounds each, but collectively, they come at a price. How much do you actually use your subscriptions? Could you live without them? You might find that ditching the subscriptions helps you to live a fuller life, spending more time socialising, broadening your horizons and being more active. But, of course, some downtime is still important, so maybe choose your favourite or most frequently used subscription and trial cutting out the rest. on a similar theme, it’s worth shopping around for better deals on your bills too, including your phone, gas, electric, insurance and more.
Cheaper supermarkets – budget supermarkets really make your money go further for your weekly shop. You could buy a whole trolley full of produce in Aldi for the same price as a basket of name-brand goods in Tesco. Personally, I prefer the continental supermarkets where I’m more likely to find fresh produce and regional specialities, so I do the majority of my shopping there. However, for some things (like Malteser hot chocolate), I’m yet to find an alternative that I’d happily swap to, so I get the basics in Aldi or Lidl, then visit Tesco or Sainsburys from time to time to pick up my favourite branded items.
Less takeaways and meals out – eating out or getting a takeaway is convenient, sociable and satisfying. Dining out is a treat and that is exactly how we should see it. Having regular takeaways and meals in restaurants normalises it and takes away the novelty of treating yourself. You don’t have to stop doing these things, but it is expensive (and less healthy) than cooking your own meals, so saving it for special occasions and treats is great for our bank balance and waistlines too.
More affordable social activities – as I said previously, socialising and downtime are important and we shouldn’t cut out all our luxuries. That would only set us up for failure and feeling miserable. Instead, why not think outside the box when it comes to socialising. A cinema trip could cost you £10 or more, but a movie night in with friends and popcorn is equally as fun and far more affordable. Instead of going our for dinner, why not try a ‘Come Dine With Me’ experience with your friends. You might discover a hidden talent for cooking and it would cost a fraction of the price. There are also many free activities that you can consider, from visiting museums and castles, to beach trips and mountain walks to fill your weekends without spending a penny.
Less clothes shopping – if you enjoy going shopping with friends or you’re a regular online shopper, it can be your bank balance’s worst enemy. Some of my friends spend a small fortune on clothes, and as much as I like to look my best, following fashions and trends is something that I’ve grown out of in recent years. I now prefer to buy fewer, but better quality (sometimes more pricey) clothes that I love and know will suit me and my style, and that will last longer. Not only that, but I feel good knowing that I’m not fueling ‘fast fashion’ and my choices are not having such a negative impact on the environment. Shopping trips are no less fun if I don’t always buy new things, because sometimes it gives me fresh new ideas on what I can do with the clothes I already have.
Make a packed lunch – buying lunch every day in work is an expensive habit to fall into. Yes, it’s convenient and there are lots of grab-and-go options for a tasty lunch, but £5 or more every day adds up. Instead, you need to get into the habit of preparing your packed lunch the night before. Whether that’s cooking a bit extra for dinner and taking leftovers, or creating a healthy wrap, salad, sandwiches, soup or jacket potato. It will save you a bundle of money and probably be far healthier at the same time.
Saving money, whatever your end goal, can feel like a huge challenge (especially in January – which feels like the longest month ever!). But by following a few of these simple suggestions, you’ll see your savings starting to build up quickly and your spending habits will fall back in line.
Taking small steps to save money every day is the best way to achieve your new year’s resolution. In fact, breaking any goal down into manageable, bite-sized steps is the ideal way to set yourself up for success.
This is by no means an exhaustive list of suggestions for saving money. Everyone finds their own little ways and methods that work best for their individual circumstances. These are just a few of the tips I’ve found useful over the years and shared with my friends too. But I’d love to hear your ideas in the comments below!