If you are getting nowhere fast trying to save some money away for a special occasion, an emergency fund or a deposit on your own house, there is probably a good reason why.
I have been here myself, I just could never seem to get going and get any significant amount of cash stored away. I had nothing for an emergency, our wedding was just a distant dream and owning my own home was a fantasy I never thought could possibly EVER happen.
There were fundamental reasons behind this and if you’re failing at saving too, some of these factors could well be the reason.
You spend before you save
This is a tried and failed technique I used for almost 17 years. Take it from me, it doesn’t work so stop fooling yourself.
When you look at your bank balance on payday, you instantly start to chop it up into 4 and a bit weeks. You’ve already told yourself what is there to spend. You may even be doing an old David classic of trying to skim £50 a week off that weekly allowance. STOP IT!
Set up a standing order to a savings account, an ISA or a retirement fund to leave your account on payday. Now when you start to divide your money up over the month you’re working with a figure with your savings already deducted. If you never see it, it isn’t there and you don’t miss it.
You make excuses
Don’t be ashamed, I was the biggest bag of bull shit excuses you can imagine. I didn’t earn enough, my expenses were too high and there was barely enough to have any sort of life with as it was. What a crock!
I ate out twice a week and ordered take away on another four of the seven days of the week. I cooked once, some weeks twice a week. When I ate out I bought several rounds of drinks, blowing even more money.
There was always beer in the house and I partied away most weekends, but it had nothing to do with my lifestyle, oh no, I just didn’t earn enough!
Be honest with yourself. Cut down on the meals out, the take away food, nights in the pub etc. I’m not saying you must live like a nun, but if you have any designs on saving money away you also shouldn’t be partying like Paris Hilton every week either.
Find a balance and stop making excuses whatever they may be!
You don’t shop smart
If you’re failing at saving you probably aren’t shopping smart enough to maximise your saving potential.
Make a meal plan, don’t deviate from your shopping list and start doing your food shop using the price per unit technique. Just because it says special offer it doesn’t necessarily mean there is anything so special about it.
Switch your gas and electric to a cheaper provider. It is one of the easiest ways to put an extra £200-£300 a year back your pocket. What’s more, if you fix down the price you won’t be affected by the yearly price hikes.
Also look at ways to cut your consumption down, a few small changes in the way you use your energy can make a big difference on your bill.
Cut down your TV subscription. The top packages cost an absolute fortune, work out what you watch and see where you can shop accordingly. Call your provider and tell them you’re no longer getting value for money as you’re not watching the channel’s enough.
The amount of times I have done this and got the price reduced but still got to keep the channel for six months is unreal. Make a note of the date and repeat again when your six months is up. I found this worked great for sports and movies in particular.
Shop around for a cheaper deal on your insurance packages. Very often you’ll find not only can you get it much cheaper, but also get more cover for your money too.
You don’t have a plan
If you do not plan ahead you will not save any significant amounts of money. Know what you’re saving for, if you have no goal you’ll lose focus and start spending frivolously again. Consider having multiple accounts for the different things you’re saving for. Seeing each pot growing will keep you focused on your end game.
If you have an emergency and need to dip into your savings, you can now decide which pot you would like to take it from, rather than it all being in the same account and you really not having any idea which pot has been deducted.
If you are worried about a credit check appearing on your credit file you may want to consider icount Money, they can offer you a sort code and account number in minutes and there are no credit checks. Although, you will not earn any interest in a prepaid account like this.
As mentioned above, make a meal plan and a shopping list, it will stop you from buying things you don’t already need. Also, make sure you check your cupboards so you are not stocking up on anything you already have.
You don’t take advantage of cashback deals
You can earn a ton of cashback by signing up to cashback sites such Top Cashback and Quidco. It’s always worth checking to see if there is anything available to you before making a purchase to see if you can earn why you spend.
Anything you earn in cashback can be saved away into one of your pots.
You can also find cash rewards and vouchers from exercising using your Fitbit and other trackers. Check the link below for more details.
There are lots of things that can stop you from achieving your saving goals. Only you can make the necessary changes to hit them.
What changes have you made to help you save?
He is also a contributor to Clear Debt, ICOUNT Money and M1 Debt Advice blogs discussing all things personal finance.