Ever had one of those days where your washing machine has broken, the kids come home from school needing new shoes and you have just remembered that your car is due it’s MOT this week?
Yes, we have all had one of those days and wished for a money tree at the bottom of the garden! Wouldn’t it be a great feeling if you had some money set aside for a rainy day just like this?
Saving may sound like something that is hard to do and you may feel a little overwhelmed knowing where to start, but fear not as we are here to guide you in the right direction and show you how you can start saving by taking just a few of these money management tips for beginners:
Step 1: Know what’s coming in and out
First things first, you need to know what you have coming in and what you have to payout. You will then know what spare money you have each month.
Why not use our budget spreadsheet that is designed for beginners in money management
After doing this exercise you may be thinking where is my spare money going? If this is the case then check your outgoings that you have written down against your bank statements and note the additional things you are spending your money on.
Are you surprised on at where you are spending the spare cash that you have? Were you aware of how much you spent on takeaways each week or how much you have spent on playing online bingo? Yes, well again you are not on your own!
When looking at your budget remember to be realistic, did you take into account the money that you spend on the kids for their birthdays or their school uniforms? Rather than a big expense in one month, could you put a bit each side each week to spread the cost? can you put a bit of money aside each week to help spread the cost?
Now that you know where your money is going you can start to budget what you actually want to spend and look at where you could potentially reduce your outgoings.
This leads us nicely into…
Step 2: Look to change your spending habits
You now know where you are spending your money so you can start to look at what ways to you can change your spending habits. You may be able to cut back in certain areas, switch to a cheaper alternative or reduce the frequency of something you were doing which was costing you money.
Go back to your budget and see what difference these changes will make, how much money will these changes save you? Can you set aside some of this money to start saving for your rainy day?
Step 3: Plan for the future
This is one of our best money management tips…
Have you recently paid something off like a loan or the new TV you had last year? What are you going to do with the money that you have been used to paying out?
You are used to budgeting and living without this cash so could you start to put this amount to one side to save or perhaps half of the amount?
If your not quite in this position yet, do you have anything coming up that you will be paying off and will then give you’re the opportunity plan to start saving and putting a bit aside?
Ultimately by doing the above, you will have taken the first couple of steps towards saving. It only has to start will a small amount but it is still saving. It may not cover the entire cost of your replacement fridge or all of the MOT for your car but at least it will be something towards it.
Over time, just as you have changed your spending habits, you will have replaced some of them with a saving habit and you will see your rainy day fund grow.
Just remember that by making a few small changes, you could start doing something that you never thought possible!
Step 4: Save! Save! Save!
Look at opening a savings account with your existing bank. As you are already a customer this will be simple for you to do and you will most likely be able to do this on your mobile banking app.
Once you have a savings account open you can set up a standing order on a regular basis to get you into the habit of saving. Your bank may not offer you the best rate on your savings but it is a simple and easy way to get you into the habit.
If you’re not quite at that stage yet, why not open a fee-free bank account
Once you get into the habit of saving, an alternative is something like Hyperjar, particularly if you use Lidl for your weekly shop. It is suitable for those who save and budget ahead for the coming months. An account with Hyperjar allows you to deposit money with certain retailers (or merchants as Hyperjar refer to them) in advance (like Lidl) and earn interest on the balance.
You will be provided with a smart Prepaid MasterCard that will debit the relevant “jar” when used. In contrast to companies like Klarna and ClearPay, the ethos of the app is “pay now, buy later” rather than “buy now, pay later” and opening an account will not affect your credit score.
We have a whole page dedicated to other money management tips that may be of interest to you
Hopefully, this will give you a bit of guidance on how you can start to save money and the different ways in which you can do this.
We know that it not easy to get going but if you have been able to follow the steps we have shared with you then it will enable you to potentially avoid taking out credit when your rainy day happens, and save you even more money on the interest that you would be paying on the credit!
By making some small changes you will be starting your money makeover and you will be putting yourself in a better position financially.
We hope this has given you some inspiration to look at budgeting and start saving….. good luck!