Saving was one of the areas I used to struggle with because I wanted instant gratification. Over the years I have learnt to be disciplined. I now plan for most of my spending and it is more satisfying as I won’t be left out of pocket. Here are some tips I use to save money.
I firstly decide on what I want to save for, it could be capital for an investment, money for a new luxury handbag, a holiday or a house deposit. At this point if there is more than one person contributing to the total income e.g. a married couple it is always important to agree on the goals first. When all parties involved are in agreement it makes it easier to save together.
I will carry out research to find out how much the item costs. I also account for hidden costs that might crop up. Try to look at comparison websites and maybe contact the companies selling the items. This will help give you a realistic amount.
I then look at my budget to see how much I am able to save every month. This will determine how long I need to save for. If necessary some expenses will be cut in order to accommodate the new goal. An example of this is when I once made a saving on my mobile phone. The contract had ended and instead of upgrading my phone I opted for a sim only package. This enabled me to save me an extra £30 a month for a year.
I always like to visualise the item I am saving for as it helps motivate me to save. When my husband and I were saving up for a house deposit, we started visiting show homes long before we had enough money for the deposit. When we walked through the rooms and envisioned ourselves living there it motivated us to save more. During the months, we were struggling to save, we would visit the show rooms again just to keep the vision alive.
You can’t predict what happens in life sometimes situations out of your control will demand that you deep into your savings. As we were saving for the deposit for a house, my grandmother in law passed away and we had to buy a ticket for my husband to go to Africa. Debt was not an option as it would have cost us more, so we used part of our savings. When he had returned we revisited our budget and removed some “luxury” expenses. We reduced the money allocated to groceries, scrapped the “going out” allowance and cancelled our car insurance as we only used the car during weekends. We used this budget for about 3 months then reverted back to our original budget.
Aggressive saving can literally make you want to give up if you don’t treat yourself every now and again. When working out how long it will take to save, if the saving period is over 6 months, halfway through I always incorporate a saving holiday. This means one month instead of saving I treat myself. This helps motivate me to save because I will be breaking up the saving periods.
Once a goal is achieved, set more goals so that saving becomes a habit.