Saving money seems hard in a cost of living crisis, but MoneyMagpie Editor and financial expert Vicky Parry has some unusual tips to help you find ways to save
When we think of saving money, the first instinct for most of us right now is: but how?
The cost of living crisis, rising rents and mortgages, winter bills and Christmas looming all mean it feels like putting any money aside for a rainy day is impossible. There are some sneaky ways you can trick yourself into saving, though – every penny helps and you’ll be amazed how fast it can add up.
Round up your spending
Most banking apps now have an option to ‘round up’ your spending. It’s the easiest way to save money without noticing. All you need to do is select whether you want to round up to the nearest pound, or £5. When you make a purchase with your debit card, the amount is automatically rounded up to that nearest amount.
For example, if you want to round to the nearest pound and you spent £4.55, a further 45p will be siphoned into your savings and the spent amount will be £5 total. Even when it’s just a few pennies each time, over the course of a year this can save a nice chunk of change without any effort.
Use cashback websites
Cashback is one of MoneyMagpie’s favourite ways to make saving easier. Use a cashback site like Topcashback, Quidco, or Swagbucks whenever you shop online to find out if you can get a percentage back on your purchase. You can also earn extra cashback if you go via these sites when it’s time to switch your insurance, broadband or energy supplier, too.
You’ll earn a small percentage back on purchases which adds up over the year. If you periodically withdraw your cashback earnings and pay them into a savings account, it’ll be easy to save on things you were going to buy anyway. Check with your bank account too – many will offer cashback deals for in-store purchases at real life stores, restaurants, and cafes.
Take on a money challenge
Turning things into a game can be really motivating for some people, especially if you participate with others. A common challenge is the 52-week challenge, where you save increments every week. For example, you save 50p in week one, £1 week two, £1.50 week three and so on.
If that sounds too much, the penny challenge is just that: a penny a day in incremental amounts. Two pence day two, three pence day three and so on. On the final day of your savings year, you’ll only need to set aside £3.65 on that day – and will have £667 in your savings pot.
Gamify your saving with others to motivate yourself further. Some people choose to pay into jars for weight loss challenges, for example, which benefits your health as well as your pocket.
Set achievable savings goals
Think about the small things that you want but don’t really need. A computer game, a new purse, that limited release Fenty lipstick. Instead of impulse buying as soon as you want something, delay the gratification by saving for it.
Not only will it feel more deserved when you get it, but taking time to earn something with savings instead of spending on a credit card or overdraft will put you in a better financial position. It’s also easy to achieve: for example, if you forgo a weekly takeaway coffee at an average cost of £5 a week, you could afford most small things you want in just a couple of months.
Pay yourself first on payday
We automatically try to pay our bills first on payday – which is important! However, set aside an amount from every pay cheque the day you get paid. Even if you can sweep £50 each month into a savings account, that’s £600 saved in a year. (In fact, if you’re on a low income and qualify for a Help to Save account, that £600 will nab you a free £300 bonus from the Government, too!).
Set up a direct debit to go out every payday, automatically paying your savings into your savings account. If you can, hide the visibility of your savings account on your savings app too, as this can help reduce the temptation to dip into it if you can’t easily see how much is in there.
Try the 30-day rule
For big purchases, don’t make any impulse buy. There are, of course, sometimes emergencies which require a large spend, such as a new washing machine when yours breaks down entirely. However, for things that aren’t urgent, take time to think about them.
If you like to buy online, some websites like Amazon let you create wishlists. Put items you want onto the wishlist and take time thinking about whether you actually need it or if you just want it. If you really want it, use a price tracker like CamelCamelCamel to be alerted to a price drop to make sure you don’t spend over the odds for it.
Think of money in hours worked
Sometimes, saving is all about your mental approach. It can be easier to save money when you think about how many hours you have to work to earn it.
For example, if you earn £15 an hour and the thing you want to buy costs £150, you have to work over ten hours (to allow for tax and National Insurance deductions) to earn the money to buy it. That’s over two days’ work! This can be a great way to stop yourself from overspending.
Put discount savings in an account
Finally, one of our favourite ways to save at MoneyMagpie is, whenever you get a good deal on something, save the difference between what you paid and the original purchase price into a savings account.
For example, if you get something in a sale for 50% off that would have cost you £50 but instead only cost £25, put another £25 into a savings account. Not only is this a good way to save, but it also makes you stop and think about whether you actually need the item you’re buying – or if you just want it right now.
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