Many of us do not have as much money saved up as we would like. It can sometimes feel that we are not making any progress in contributing to our savings or that they are increasing much more slowly than we would like. There are ways that you can increase the amount that you are saving without waiting for an increase in income. It will mean doing some budgeting though and making sure that you are not overspending. There are some steps that you can take so that you can review your spending and make sure that you have enough money to save more each month.
– Separate spending into necessary and luxury – in order to start it is worth evaluating your spending. Take a look at past bank statements and see where you spend money. Some money spent will be on necessary items such as food, utilities, tax, loan repayments and rent or mortgage and some will be on luxury items such as apps, DVDs, jewellery, holidays, home accessories and eating out. There may be some items that are harder to classify and you can always ignore those or have a third classification in between the two.
By doing this you will be able to see what items you might be able to stop buying and the items that you have to continue to buy. You may already see items that perhaps you do not need that much and do not get enough pleasure from to warrant spending the money on them when you want to be saving up. You may decide to stop spending money on certain things right away. If you find it hard to decide then rank them in order of importance with the necessary items at the top and then you may be able to see where you can cut down on spending money.
– Set some goals – it is worth setting goals so that you can focus on exactly how much extra money you would like to save each month. Without having a focus it can be much more difficult to be motivated in reducing your spending. If you know that you want to save a specific amount each month then this should help you to focus better on what to cut down on. It is worth also thinking about why you want to do this. Perhaps you are saving towards a specific thing, such as a holiday, new car or family birthday or you are putting money towards your future, retirement, having children or things like this. It is good to write down the reason that you are saving as well as how much you aim to save each month and look at it regularly to remind yourself and to motivate yourself.
– Save at the beginning of each month – many people will put money in their savings account at the end of the month. They will see how much is left and just before they get paid they will transfer the money left into a savings account. The problem is that we will often look at our account balance in order to decide whether we can afford to buy things and if there is money there, we will spend it. Therefore, if we put some money in a savings account at the start of the month, it will not be available in the current account to spend.
– Compare prices and think before buying – when you are buying anything whether you are buying a loaf of bread or a new insurance policy it is wise to start by thinking about whether you really need what you are buying. Consider whether you can delay buying it or go without it altogether. If you do decide to buy it compare the price with other similar items to make sure that you ae not paying more than necessary.
– Put left over money in savings – at the end of the month make sure that you put any remaining money into your savings account. This will help to top it up even more and you will be able to boost your savings even more. Do not worry about not having enough for the following month as you can always draw back out of the savings account if you need extra, but you are less likely to spend it this way compared with spending money that is easily accessible in the current account.