With saving money being one of the top 5 new years resolutions, we have put together 10 tips to help you save more in 2021.
1. Open a second bank account - A lot of people don’t realise that there is no limit on the number of current accounts you can actually hold. Opening a second current account will allow you to keep your direct debits and recurring payments separate from your disposable income, thus making it easier to see how much money you can actually afford to spend! If you do your spending on a debit card, then perhaps consider opening your second account with a bank that offers extra features such as Monzo, Halifax or Starling which all allow you to easily track your spending on their mobile apps.
2. Go through your direct debits and cancel any that you don’t really use or are unneeded - it can be a good idea to make a note of your direct debits (on a spreadsheet or similar) so that you can easily see how much money you are committed to spending each month.
3. If you spend on a debit card then switch to a bank that lets you round up transactions, saving the difference can be a good way to readily boost your savings without changing your habits. Alternatively, switching to a rewards credit card will allow you to earn cashback or other rewards.
4. Set up a standing order to your savings account - May sound simple, but committing yourself to saving a fixed amount each month is an easy way to give your savings a boost.
5. Consolidate your debt - If you have any debt, try to consolidate it to a single credit card or loan. This can reduce both the amount of interest you are spending and may allow you to reduce the amount you repay each month. A 0% balance transfer can be useful but watch out for balance transfer fees. Some credit cards will also offer a low interest rate for a fixed number of months or until the debt is repaid and will potentially offer this as a money transfer - in effect giving you a cheap loan. Whatever you do, do not spend on this card - setup a direct debit and put the card in a draw!
6. Create a monthly budget - Similar to noting down your direct debits, it can also be a good idea to create a monthly budget for your spending. However, try to be realistic, if you typically spend a few hundred pounds clothes shopping each month then factor this in. A realistic budget is far easier to stick to!
7. Avoid buy now, pay later schemes - try and use savings or factor in the purchases into your monthly budget (ie. an allowance for clothes or shoes etc). Spending money you don’t have is the quickest way into debt and will make things harder in the long run.
8. Manage your money on your phone - if you are considering getting a coffee but change your mind, use your bank’s phone app to instantly transfer the money you would have spent to a savings account.
9. If saving money is something you struggle with, then try one of the many online savings challenges - the 52 week challenge asks you to save £1 in week one, increasing the amount you save by £1 each week (ie. £2 in week two, £3, in week three). Since the 52 week challenge asks you to be saving £49-£52 a week at the end of the year, a new take on the challenge is to begin saving 1p and increase this by 1p each day for 365 days of the year. Remember that the real key with these challenges is to change your behaviour and make saving a habit, rather than an afterthought.
10. Shop using cashback websites. Cashback websites earn a commission from the website they direct you to and share a portion of this with you. As such you can easily recoup up to 25% cashback on purchases you were going to make anyway. This can quickly add up for larger purchases such as car insurance - just check the small print to make sure you qualify and don’t spend the extra money before it hits your account!