I know that lots of people find it hard to save money. I know that for some, it’s not always possible to put money aside. Whatever your situation, you’ll still benefit from observing this list of good habits for saving money that I’ve put together.
Having a rainy day fund is important, take it from someone who hasn’t always had one. There will be a day that you need to spend money that you haven’t budgeted for and debt is a less favourable option.
This post will cover those habits that can help you change the way you manage your money. I won’t be advising on where to invest yet as I haven’t researched it enough to give a fully-formed opinion.
First things first, take a long, hard look at your finances. Break down your spending into categories. The first category is the compulsory spending with no wiggle room (think: rent). The second category is compulsory spending that you might be able to reduce (think: utilities, car insurance etc). The third category is leisure spending, things where if pushed, you can do without (think: coffees, magazines, meals out).
Reduce your leisure spending
Maybe you can’t live without your Saturday pre-work coffee, but perhaps you can enjoy your Wednesday afternoon stress-out coffee in your staff room instead of Starbucks. Money that you spend ‘as and when’ can be the biggest drain on your wallet. Try to budget for these little treats by having a set amount in cash on you. Once the cash is spend, you’ve exhausted your budget. This helps you to make much wiser choices.
Reduce your bills
Shop around. Switch supplies. Negotiate cheaper deals with the companies you already love. There’s always wiggle room. Work out how much you’ve saved and put that money aside. This can be the pot that starts your rainy day fund.
Save first, spend second
Once you know how much you can afford to keep aside each month, put that away first. That way you won’t be tempted to spend any money that’s just sitting around in your account. Telling yourself you’ll save what’s left is a big mistake. There’s never anything left.
You don’t have to be super organised. You can just write down a few ideas of what you’ll be cooking during the week, then make a shopping list and stick to it. If you go to the supermarket and do some freestyle shopping, you’re bound to come away with all sorts of exotic things, as well as empty pockets. Stick to the plan and save.
Plan, plan and plan some more
You want a holiday? Save your spending money first, then book it. Start saving (or buying) for Christmas immediately after the big day. The same goes for the summer holidays and school uniform shopping. Start putting money aside as soon as you possibly can, you know these things are coming, don’t let them sneak up on you. They’re not a surprise. Planning better will change your life.
And finally, do your research!
It’s not up to me to tell you where to keep your money. I haven’t made my own mind up yet so it wouldn’t be fair for me to advise. What I will say though is it’s important to keep your savings in a separate account. If you’re unsure what to do while you figure things out, I would suggest speaking to your bank and using an account that gives interest but also easy access to the money. That way, you can move it easily once you’ve decided where it will go.
Do you have any good habits of your own to share? What do you to help you save?