Saving a little bit of cash every month is something everyone should strive to do. Not only does it put you in a good position in case of emergencies but it also gives you much more flexibility when it comes to purchasing holidays, gadgets and any other life luxuries (so you won’t have to take out any loans!).
To give you an example, if starting in January, you put £100 away every month, and it comes to summer and you want to get away for a little while, you will have £600 in your savings ready and waiting. This could get you an all-inclusive week away in Spain or similarly many other holiday destinations in Europe or Africa.
Perhaps you are waiting anxiously for a new tablet to be released, by saving £100 a month you are able to buy your new tablet without it affecting your day to day life. It is really hard to deny the power of having savings and the positive influence it can have on your life.
Your first step towards saving is getting some kind of savings account with your bank or a building society. While you are unlikely to get a reasonable rate of interest on your savings it is still worth shopping around until you find some suitable. Some savings account have no easy access and are locked for a certain amount of time, these will usually offer a higher interest, it is up to you to decide if this is worth it in your circumstances.
Now you have a savings account you need to work out how much you can afford to save each month. The best way to do this is to look at your income and expenditure on a monthly basis.
So write down a list:
• How much do you spend on bills every month? (This includes utility bills, insurance policies, television, phone, broadband, council tax, and any other monthly bills you need to pay out)
• How much do you spend on food every month?
• How much do you spend on rent or a mortgage every month?
• How much do you spend going out every month?
• How much do you spend on travel every month?
Now right down what you earn every month and subtract your expenditure from your income and you will have the amount of spare cash you could save every month! If you end up with a minus number you may want to have a look at reducing your outgoings, can you cut down on food or your expensive nights out? Can you cancel that Sky package or get it cheaper with another provider? Find out ways to cut down on your expenses until you break even, then next time your income increases, start saving!
Here are some great ways to cut down on your monthly expenditure:
Reduce your phone bill
It might seem like a good idea to get the best phone out when it comes to upgrading, but how long does the excitement last? Is it worth £40 to £50 for the next 2 years? Why go with an iPhone when they are so expensive and Android and Windows phones do the same and more? You can get great phones on £20 a month contracts. Over a year you are saving more than £300!
Reduce your spend on food
How much are you spending on food every month? Are you shopping in a supermarket or an expensive Tesco Express or similar? Get yourself down to a supermarket once every week or so and buy food in bulk. Buy yourself a packed lunch for work as well. You will be extremely surprised at how much you can save.
Cut down on going out
Do you go out on Friday night and spend £100 on clubs and booze? You can stay in and watch a film for a 100% reduction in the cost. Why not have some friends round and have some wine? You can stay social without spending a fortune.
Hopefully this article has inspired you to start watching your money and putting it aside starting TODAY.