How to save money when you struggle to budget
The cost of living crisis has officially hit, with prices for everything from heating to food skyrocketing.
If you struggle to budget at the best of times, a reduction in your disposable income will make things even harder. Essential bills come first, and often saving falls by the wayside.
That doesn’t mean you can’t get your finances in order, though, just that you may need to readjust your methods.
Putting too much pressure on yourself to save or setting unrealistic goals can be counterproductive, causing you to feel deflated and give up.
Similarly, if you’re used to spending without thinking, you may be stuck in an unhealthy money mindset that stops you noticing impulsive purchases that harm your goals.
To help you out, we’ve enlisted the help of financial expert David Young from Free Price Compare. Here are his tips to save money if you just can’t budget.
10K this year, easy
Particularly if you want to save for a home or large purchase, it’s a natural response to set a big goal. However, savers who set unrealistic targets may see little progress and then give up shortly after.
‘I am a massive advocate of the mantra, look after the pennies and the pounds look after themselves’, says David.
‘Setting a saving target is great, but it’s not a necessity. Instead of implementing a specific target, employ an objective to stick to habits such as taking appliances off standby, skipping a weekly take away or walking a journey instead of driving.
‘These small changes can reap huge rewards’
Look back before moving forwards
David says: ‘Examine your recent bank statements (three to six months) to ascertain where most of your disposable income is spent.
‘It’s here that you can determine where to cut back and pause unwanted subscriptions, making some easy savings.’
There’s no point saying you’ll spend £10 on food a week when your basic food shopping normally costs £50 – this is setting yourself up for a fall.
‘Regularly asses your bank statements,’ adds David, ‘working to make it a habit rather than something to fear’.
Take things day by dat
According to David, examining where you can save money over the month can make the prospect of saving a huge chore.
Instead he says, ‘Initially, focus on what you can save day by day. When you have formed daily habits, move onto looking at where you can save throughout the week, then each fortnight and then month.
‘Take baby steps to ensure that new saving habits become second nature, rather than one-time wonders.’
Hanging out for new wears
To avoid impulse purchasing – and save £100s per year in the process – implement everyday ‘hacks’ that’ll show you what you need and what you merely want in the moment.
David says: ‘Turn your clothes hangers the same way at the start of each month. Once you have worn the item, turn that hanger around the opposite way when placing it back in the wardrobe.
‘This allows you to see what you are wearing, and the clothes you no longer wear. It’s here you can decide whether to wear, sell or donate.’
If you have the urge to buy a new item, check to see whether you wear similar things you already own. If not, it’s definitely not worth the spend.
Calculate the total amount you can save
Total savings per year (£)
Take a cooling-off period
According to David, a sudden, blanket ‘no spend’ ethos is the reason a lot of people end their saving journey prematurely.
‘It’s an unrealistic expectation to adhere to a no spending ban,’ he says.
‘Instead, if you wish to purchase an item that would normally be regarded as an impulse buy, simply wait. If you still wish to purchase after a, say, two-week period, then it’s clear you truly want it and you can go ahead and purchase’.
One good way to do this is to take a picture of the item you want to buy. Does looking back at it spark joy after your cooling-off period, or has the need for retail therapy subsided?
Return of the cash
‘It’s easier than ever to spend money as contactless payments limits raise to £100 and Apple pay is limitless,’ says David.
‘Contactless payments can skew what you believe you are spending. Withdrawing cash once a week, or even every day can help you determine what you are physically spending and aid in budgeting’.
It may be worth trying the envelope savings method and tailoring to your own needs, keeping yourself accountable and removing contactless temptation.
Always ask why
David says: ‘Once saving becomes second nature, and you can see the amount of savings you accumulate rise, it will become second nature. However, in the beginning it can be difficult.
‘Whenever you are struggling to save, always remember the reason why you are to help maintain motivation. Write it down in a place you always look at, or even keep it as a screen saver on your phone.
‘This will ensure that the reason is always front of mind.’
Deactivate the guilt
When embarking on any lifestyle change, it’s inevitable that hiccups will happen. It can take anywhere from 18 – 254 days to develop a habit into second nature, so try not to beat yourself up if you falter.
If you make a big purchase, spend more than expected at the weekend, or buy a spontaneous takeaway, don’t punish yourself with ‘spenders’ guilt’.
Instead, reassess what you would do differently next time and move on. Tomorrow is a new day.
Do you have a story to share?
Get in touch by emailing [email protected]
If you want more tips and tricks on saving money, as well as chat about cash and alerts on deals and discounts, join our Facebook Group, Money Pot.
Source: Read Full Article