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Simple Ways to Start Saving Money

BY READERS DIGEST

1st Jan 2015 Managing your Money

Simple Ways to Start Saving Money

Many British families are struggling to make ends meet, while pensioners are the biggest group in Britain on the brink of poverty.

It is time to take back the control of your finances and find ways to put some money aside to guarantee you don’t need to struggle to survive.

Take a Look at Your Spending

The first step is to understand where your money is going. Too many people keep paying their bills and spending money without knowing exactly what is going where.

Look at your bank statements and see how much money you are spending each month on things such as electricity, food, entertainment and debt repayments. See if some areas take a big chunk of your money and find ways to save money in each category.

A good rule of thumb is to follow the 50-30-20-rule. According to the rule, you should spend 50% of your income on essential payments, such as mortgage repayments and electricity bills, 30% of your income on entertainment and fun, like eating out, and 20% of your income on savings accounts and pension funds.

If you currently have a lot of debt, you should find ways to pay it off quicker before you start setting money aside. Some debts, such as credit card debt, have high interest rates and the longer you repay it, the more you’ll end up paying. Consider contacting a debt management charity if you need help with repaying debts or dealing with creditors. 

Find Better Deals

Now that you know where your money is going, you can see if there are better deals available for you. Perhaps you are currently paying too much on your car or health insurance. Some price comparison websites are great for ensuring you get the best deal possible.

You definitely need to check your insurance deals, as well as your energy deals. The chances are you’ll be able to save money by switching to a new deal, especially if you’ve never done it before.

Become Good at Saving Energy

A number of money saving tips require you to change your habits. One of the simplest lifestyle changes to make is to reduce your energy consumption. Here are some great energy saving tips for saving money from Best Electric Radiators. Once you’ve found the best energy deal for your home, you can start utilising the simple tips by the Energy Saving Trust and start saving a small fortune.

Seemingly innocuous things like washing your dishes using a bowl, or using an energy saving mode on the dishwasher, can save quite a lot during the year. You could even save a lot of money by turning down your heating by just one degree, or using the timer feature to use it for 30 minutes less each day.

Keep an Inventory

Whether you are going for grocery shopping or looking for new winter shoes, knowing what you already have will guarantee you won’t end up spending money on things you don’t even need. Saving money is easier when you have an inventory of the things you already own, or at least know exactly what you’ve got and where everything is.

You can start by going through one closet at a time and listing the items you have. If you find something you know you aren’t going to use, you can even consider selling it on eBay to make a bit of money in the meantime!

Whenever you are thinking about purchasing something new or heading out to the grocery store, check first to see if you require the item.

Have Fun with Hobbies

Of course, you don’t want to start saving money and stop doing things that made you enjoy life. Eating out can be very expensive, but you can have the same kind of fun by cooking a meal at home for your friends. 

The key is to find a hobby that doesn’t cost a lot of money, or that can help you save money. You might want to learn about DIY or start baking. Instead of going out to the pub with friends, invite them over and play board games or watch your favourite TV shows at home.

The above money saving tips are a great way to get into the habit of saving, and you’ll quickly find that small savings can add up quickly. If you know where your money goes and you start thinking about your purchases more carefully, you’ll end up saving a surprisingly large sum!

 

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