Saving money is one of the biggest challenges most people face during their whole lives. As soon as payday hits, the average UK employee quickly spends a staggering 21% of their disposable income- yes, this is on payday alone! A recent survey carried out by financial solutions provider Suits Me has unveiled this surprising fact, with takeaways, drinks and meals out being the biggest culprits of this splurge.
Whether you are struggling to make ends meet each month, you are saving up for a large purchase or you simply want to be smarter with your money, there are 4 highly effective steps to take that will help you to immediately start saving and boost your finances. Keep reading to find out more.
1. Start Budgeting
First, you need to draw up a household budget. People often struggle with money because they do not have a budget in place that allows them to control their spending. You should add up your total household income and then calculate what your regular expenses are and try to find ways to reduce this spending. You might also want to try dividing your total income into different categories of spending, such as rent/mortgage payments, bills, food, travel and non-essential spending.
2. Avoid Impulsive Shopping
Another reason that people struggle with money is impulsive shopping. This is very easy to do, especially when online shopping is so easy and you can get items delivered the next day. To prevent impulsive shopping, always make sure that you give yourself at least a day before deciding and try to think about if this is something that you really need. If it is something that you really need, you should always research and shop around to get the best deal.
3. Use a Prepaid Card
If you struggle to control your spending then you might find using a prepaid card is a good solution. Every week or month, you can load the card up with the amount of money that you can realistically afford to spend. Once/if you run out, this will stop you from going over and spending more as it is not linked to your bank account. This can also be a good way to track your spending to see if there are areas where you could be making savings.
4. Make Savings on Food
Food is one of the biggest monthly expenditures, but also an area that you can always make big savings. Instead of eating out or ordering takeout, you should try cooking meals from scratch as this will help you to save a huge amount – it is also good fun and a way to eat healthier. Other ways to make savings on food include shopping at a cheaper supermarket, buying non-brand products and buying in bulk.
These are 4 of the best strategies to use if you are looking to reduce your spending to make savings. Many people struggle to save money each month, but when you are able to take control of your spending and know how to make savings then you can quickly start to change your finances and improve your situation.