5 Tips For Starting To Save

Today, I'm sharing my five tips for starting to save and saving when you are on a tight budget to get started as soon as possible with saving.

How good you are at saving depends on your money personality; some of us are more prone to saving easily than others. But no matter your money personality, you can start a savings habit.  You just need to start.

Anyway, here are my five top tips:

Work out How Much You Can Save

Determining how much you can save each month is the cornerstone of a robust financial plan, especially for small business owners and freelancers navigating the ebbs and flows of variable income. This process isn't just about finding a number; it's about empowering yourself to make proactive financial decisions that align with your long-term goals.

1. Dive Into Your Budget: 

Take a comprehensive look at your monthly income and expenses. Utilize your budget as a tool to identify areas where your money is going and pinpoint opportunities for savings. Recognizing this amount is crucial, even if it's as modest as £10 a month. It's not the size of the contribution that matters initially, but the consistency and the habit it builds.

2. Automate Your Savings: 

Once you've identified an amount, no matter how small, automate the transfer to your savings account as soon as your income arrives. This 'set it and forget it' approach ensures that your savings grow consistently without the temptation to spend what you've earmarked for your future.

3. Adjust as You Go: 

Remember, your financial situation is dynamic, not static. Regularly review your budget and savings goals. As your income grows or your expenses decrease, incrementally increase the amount you're setting aside. This gradual escalation will bolster your savings over time without overwhelming your financial situation.

4. Celebrate Small Wins: 

Even small contributions to your savings deserve recognition. Each deposit is a step towards financial security and independence. Celebrate these milestones to maintain motivation and keep your financial goals in sight.

5. Embrace Flexibility: 

Be prepared to adjust your savings goals based on life's inevitable changes. Flexibility is key to maintaining a sustainable saving habit without sacrificing quality of life.

By methodically working out how much you can save and committing to that amount, you're not just saving money but investing in your future. This disciplined approach lays the groundwork for financial resilience, ensuring that you're prepared for both opportunities and challenges that come your way.

Cut out Unnecessary Expenditure

You can cut out unnecessary expenditures when reviewing your budget after a month-end.  You can carry out an expense review if you have not yet prepared a budget.  How you do that, just grab the last three months' worth of bank statements. And just look at the amounts that you regularly spend.

You might be spending more on things you can now cancel, such as unused subscriptions.

Also, look for ways in which you can save money.  A comparison website will allow you to find cheaper alternatives for your heating bills through to items such as your car insurance.  Any reductions in your bills are now the money you can start saving.

If it's a substantial saving and you have debt, you should consider splitting the amount between your savings account and paying some extra off the debt.

Start a Savings Jar

A great way to start saving your spare change. It requires a little discipline, though, which is why it's a great thing to do if you're not used to saving.  It helps you to build a money habit, helping you enhance that financial muscle of saving.  It's also something where you can get the kids involved as well, encouraging them to save

Some great-looking savings jars are on the market, but you don't need anything fancy.  You can use absolutely any container that will hold coins.

This activity is about getting into the routine of actually saving. And when doing that, you're also telling your mind it's okay to have excess funds because you see those extra funds regularly. So it's good from a mindset point of view as well.

Dealing with Windfalls

Anytime you get a little bit of a windfall, maybe you get a bonus from work, or you're selling unwanted items in a garage sale or on eBay, you should consider savings.

If it's in cash, put it in your savings jar. And if it's via bank transfer, transfer the money from your PayPal account or wherever you've got the money from; don't put it into your regular bank account; put it straight into your savings account. This way, you're going to be less likely to spend the money because you've then got to withdraw it from your savings account to spend it. So, it's a great way of starting to save when money is tight.

Operate a Simple Saving Strategy

This saving strategy works whether you're just saving £10 a month, or you're saving £100 or £1,000 or even £10,000 a month. And it's for when you're saving regular amounts.

The system is to change the amount every three months by 10 per cent.

Please start with the savings you save each month, then increase it by 10% for the next three months. And then after that three months, you increase it again by 10%.

For example, if you save £10 per month, you'll save that each month for months one, two and three. And then in the next three months, you increase that by 10%. So that becomes £11 per month. You save that each month for three months. And then you increase it by 10% again, which becomes £12.10 per month.

Even if your income stays the same, you're starting to learn to manage with slightly less each time you increase your savings.

So that's my five tips for saving, even when you are on a tight budget.

Just to recap:

• Work out how much you can afford to save regularly by looking at your budget.
• Review your expenses, seeing what costs you can cut. And then let's save in that amount as well.
• Have a savings jar.
• Put any windfalls or any sales of unwanted items into your savings account or jar.
• Operate that simple saving strategy of increasing your regular savings amounts by 10% every three months.

If this has helped you kickstart your savings habit, please connect with me on Instagram for more personal finance, business finance and money mindset tips, techniques and strategies.