None of us want to pay more than we have to for life’s essentials, but the fact is that most of us are. Whether it’s down to not knowing where to start, not doing sufficient research on the best deals, or simply not being as organised as we’d like, at Oakam we’re here to help with our five of our money saving tips, designed to take the hassle out of savings.
1. Understand your outgoings
Before you can start saving, you need to know what your outgoing expenses are. This is a great way to quickly identify exactly how much you’re spending on essential items – for example, your household bills, food shops, or car insurance – and how much is going to non-essentials – like Friday night takeaways or trips. There are some useful and free budget planners available online to help you calculate your expenses and show you exactly where your money is going.
Cutting back on your non-essential expenditures is a really easy way to rack up your savings with very little effort.
Scrutinising your outgoing expenses will also allow you to spot any unnecessary or out-of-date direct debits that are linked to your account – perhaps it’s that gym membership that you never cancelled, or maybe a subscription to a service you no longer use. If you find any automatic outgoings like this, now’s your opportunity to click ‘cancel’ and save yourself some money.
2. Know what you’re saving for
It’s important to define your short and long-term money goals, as this will help you decide how to save. For example, if you’re saving with a house purchase in mind, it would be a better idea to look into lifetime ISAs. If you want to build a financial safety net, then a standard savings account will likely be sufficient for your needs.
Knowing your goals and how quickly you want to achieve them will also enable you to decide how much money to save. Different goals have different financial needs, so remember to bear this in mind when considering your savings.
3. Do your research
When making most financial decisions, it’s wise to do background research before committing. This is true of large or long–term purchases, as well as decisions surrounding bank accounts.
For purchases, shopping around to ensure the best value price for a product is essential. There are loads of outlets selling the same product at wildly different prices, so shopping around and not taking the first deal you find, could save yourself a potentially massive amount of money.
It’s a similar idea with bank accounts. Different banks and account types will offer varying levels of interest, or other perks. By ensuring that your account has a strong interest rate, your money will be working for you by accruing interest while it sits in the account, which is a really handy thing. Some banks will also offer a monetary bonus for switching to them, or for referring a friend. It’s worth looking out for these deals, as you can get a juicy reward for very little effort.
4. Set up a standing order for automatic savings
It can be easy to forget about saving, particularly if it’s not at the forefront of your mind. This is where standing orders can be really helpful. Once you know what amount of your monthly income you want to save, you can set up a standing order to send your chosen amount straight to a savings account.
If you set this up so that the money is moved within a few days of your monthly income arriving in your account, it means you can forget all about it and be secure in the knowledge that your account is doing the work for you. This is a really easy way to save passively, adding a little money each month towards your goal, and it should only take a few minutes to set up via your online banking account.
5. Don’t forget about loyalty cards
Loyalty cards can be your best friends for saving money instore, whether that’s in a supermarket or a high street outlet. By scanning your card every time you shop, you rack up points which then translate to either money off at the till or as vouchers for your next shop. Either way, you can save some money.
Some shops will even offer special instore deals for loyalty card holders. For example, Tesco recently introduced ‘Clubcard prices’ which are reductions on an item’s full price label and are available only to those with a valid loyalty card. So, not only are you saving on your weekly shop, but you’re also working towards future savings – what’s not to love?
While savings don’t directly impact your credit score, they’re a good way to visibly demonstrate your ability to manage your money effectively. If you do need to borrow from loan companies such as Oakam in the future, having this ability to manage your money will likely mean you’ll struggle less, if at all, with meeting your repayment obligations.
It can be pretty easy to save money when you know what to look for, and it definitely shouldn’t be a hassle to do. Our top tips are a great place to start if you’re unsure about how to save better. If you’re interested in finding out more about savings, the Money Advice Service has a great library of resources available.
Having a bad credit history is not the same as being in financial difficulty. If you think you are in financial difficulty or are finding it difficult to pay your bills on time, you should seek an alternative solution. To get debt advice information, we advise seeking independent advice from an impartial service like Citizens Advice or a qualified Financial Advisor.