This year has unfortunately brought additional financial pressures for many people.
Now, more than ever, it is important to be sensible with your income and find ways to make your money go further. Managing your finances can be tricky, but here are a few money saving tips and tricks that can help to make it easier for you.

Plan Ahead

Knowing what you spend is an essential first step

First things first, it’s time to get your finances in order. If you are guilty of tapping your card without a thought to the available balance, creating a budget is the best place to start. Budgeting helps you to determine whether you spend more than you earn. That’s never a good place to be.

The 50/20/30 rule suggests you should aim to spend 50% of your income on essentials like rent and bills.  20% should go into savings and reserve the remaining 30% for wants and personal entertainment. This is a great rule of thumb to follow if you are new to budgeting as it is simple and easy to follow.

Websites like Mint can help you to manage your budget, offering information about your credit score too. Alternatively, you could use the Budget Planner from Money Saving Expert (MSE). The free budgeting spreadsheet allows you to input your income and outgoings, while the dedicated webpage has helpful information to make sure you fill out the form accurately. Once completed the spreadsheet will generate a result. The guide then offers advice for better managing your spending, based on your results.

Another way to keep account of your finances is to track your expenses. This helps you to become more mindful of your spending. It shows you negative spending habits and provides the backbone for developing your budget plan. It also helps to beat financial stress as you get a clear picture of where your money is going.

You can track your expenses by writing down all of your day-to-day spending in a notebook, or by using an app like Emma, Money Dashboard or Yolt. Both methods help you to become more accountable for the money you spend.

If you want to manage larger savings, invest your money or need advice on pensions, mortgages or other financial topics, you may want to look into hiring a financial advisor. Professionals can charge £75-£350 per hour, or may charge a monthly fee. Be sure to factor that into your outgoings before contacting an advisor!

Reduce Your Spending

Do you ever set ‘no spend’ days?

Once you have analysed your outgoings and determined your monthly budget, it’s time to get to work! If your budget seems tight, don’t panic, there are lots of easy ways to cut down your spending. MSE’s Money Makeover could help you to save £1000s after just a day of dedication to the cause. Step 2 of the makeover sets out a list of ‘pain-free savings’, a directory of MoneySaving guides helping you to find the best deals for your household bills, debt costs and personal bills. The guide also details ways to boost your income by taking advantage of different schemes, grants and offers.

MSE also offers a tool called The Demotivator. The webpage shows you just how much you spend on non-essentials and helps you stop when you can’t afford it. By inputting details of your non-essential spending, the site will calculate the amount you spend per year on that item, as well as the number of working days it would take to pay for your unnecessary purchases – stressful stuff!

Another quick and easy way to reduce your outgoings is to set ‘no spend’ days. Simply, these are days where you do not allow yourself to spend any money. Aim for one or two ‘no-spend’ days per week. This gives you an incentive to avoid the lunch time meal deal or the taxi fare home.

Also, look out for free loyalty cards (not branded credit cards!), sign up to marketing emails and get on social media to find out about offers on day-to-day purchases. For more savings, check out Save The Student’s Free Stuff List for details of the best freebies in the UK.

Start Saving

Banking apps can help you keep the saving habit

Saving money can be difficult, especially when you are working to a restrictive budget. But if you reduce your non-essential outgoings and cut your bills, you will be in a good position to save.

One method to make saving seem more feasible for those with a smaller income is called ‘skimming’. Any time you receive a payment, cash gift, or your wages, you simply skim a set amount of money off the top and put it straight into your savings account. The amount you move over can be a small percentage of the income, or the amount that rounds it down to the nearest £10. For instance, a payment of £108.96 would be taken as £100 and £8.96 would be moved to your savings. The ‘skimmed’ amount should be whatever seems feasible for you. The key here is to be consistent and to avoid dipping into that savings pot.

Another way to make saving easier is to set up a standing order with your bank. Banking apps like Moneybox help you to save and invest for your future by allowing you to set up weekly payments into your savings account. In a year, transferring £5 per week into your savings account would accumulate to a £260 asset for the future. Moneybox also allows you to round your everyday purchases to the nearest pound, putting the change into your savings account. This way, for every £2.40 you spend on your morning coffee, 60p goes straight into your savings pot.

It is also important to make the most of pension schemes that are offered to you. This method of saving may not offer you funds that are directly accessible, but your pension is a valuable asset. Speak to the HR department at your workplace to make sure you are taking full advantage of the schemes available. The Citizens Advice Bureau also has useful information to help you to better understand your pension, how to add to it and when to use it.

It may seem daunting but don’t put off taking control of your finances, start today. There are lots of great advice websites, including this one, moneynerd.co.uk, but always remember each person’s circumstances are unique and work out what’s best for you.

And while you’re in a money-saving mood, check out these free classic kids games to keep your family entertained without spending a penny.