With average debt in UK households totaling around £5,998 excluding mortgages, it is clear that millions of people spend a great deal of money without knowing how to save. And whilst in the short term this may not seem like a big problem, in the long term a poor financial record can have serious consequences. But there are ways you can cut down on your spending, and save a little money for the future and the things that you want.
The first and most important thing when it comes to saving money is to get yourself the best deal on everything. Moreover, according to Martin Lewis, founder of the money saving expert forum, shopping around for the best prices and getting the best deals can be equivalent of giving yourself a 20 percent pay rise. Always look on comparison sites for the best value for money.
Bank accounts are incredibly confusing, particularly if you know very little about interest rates. Banks will often entice you with certain rates but they are not always the best deals that they offer. If you want to open a savings account, then it is a good idea to make an appointment with your bank to discuss the best options that they have for you. They will be able to explain their rates and accounts in plain English; this means you will understand where your money is going.
Budgeting is essential to saving money, set yourself a budget for necessities and luxuries for the month and stick to it rigidly. You need to allow yourself some money for luxuries because if you don’t then you are more likely to blow your budget. Try to set aside at least £50 per month, but aim for £100.
Having a particular goal in mind that you are saving for will mean that you are more likely to stick to your budget. Knowing that you are saving for a house or a holiday will inspire you to be more sensible with your money.
Clearing your overdraft might seem like an unnecessary expenditure, but your bank could potentially be charging you over £50 for the privilege. This will add up to £600 a year on bank charges alone and missed payments can have a negative effect on your credit history. Clear your overdraft and start to rebuild your credit history.
Paying off your credit card as soon as possible will mean that the money that normally goes to your credit card company can now go into a savings account. Pay off debt as soon as possible and you will be able to save a great deal of money.
Saving money isn’t easy; it takes time and patience, but it can be done with just a few small lifestyle changes.