Monitoring where our money’s going can have a big impact on our attitude to spending and how much we save. Read our tips to help get you started
A quarter of us are worried we don’t spend enough time managing our personal finances, meanwhile 20% of us have no savings to speak of. Here are 10 ways you can bring your finances under control and start saving more.
Find out where your money’s going
Start by finding out where your money’s being spent. It sounds obvious, but most of us don’t realise exactly how much we’re spending each month – and what we’re spending on – until it’s laid out in front of us.
Keep a money journal for a month where you write down everything you spend, or monitor things using your phone. Many banks now offer mobile apps that you can use to track spending, from bigger banks like HSBC, Barclaycard and Santander to newer mobile-only banks like Monzo, Starling and N26. Monitoring your money can help you build a picture of exactly where it’s going.
Don't ignore small change
If you keep a money journal, remember it’ll only work if you write down everything – even the chocolate you bought with your spare change. Recording all your spending helps you to see how easy it is for the small change to add up.
If you’re a keen app user, there are lots of ways you can use your phone to save (or invest) your change. Monzo’s Coin Jar feature rounds up your purchases automatically, transferring the extra coins to a saving pot, while the Moneybox app can be used to round up and invest your spare change. There are also money bots, like Plum and Chip, which monitor your bank balance and spending, work out where you can make small savings, and deposit these into a virtual pot.
Go through your statements
Grab your last three bank statements and credit card bills and spend some time going through them, highlighting any areas where you think you’re spending money unnecessarily or spending too much. This could be large insurance premiums or a magazine subscription you don’t have time to read.
Cancel old subscriptions
Brits waste £448 million a month on unused subscriptions, according to TopCashback. The most common wasted money is on gym memberships, followed by TV streaming plans like Netflix or Amazon Prime. Take a few minutes and cancel any subscriptions you don’t really use to save yourself a bit of cash.
Give yourself a money makeover
Gather together your latest bills for all your utilities, from gas to broadband to your mobile phone, and then set yourself a week to cut your bills. Tackle a different bill every lunchtime, shopping around on comparison websites to see if you could get a better deal.
According to Ofgem, UK households could save an average of £300 on their gas and electricity bill by swapping to the cheapest tariff, so a few minutes shopping around could prove very fruitful. Automatic switching services like Switchcraft, which finds and switches you to the best energy deals, can also help you to save money.
Break any bad habits
Take a look at your spending and see if there are areas where you’ve fallen into bad money habits, such as buying a coffee or lunch every day. Cutting that takeaway coffee to once or twice a week, or preparing a few of your meals at home, will add up to meaningful savings over a year. Reducing your spend by just £2 a day could save you over £700 a year.
Draw up a budget
Budgets aren’t just for the Chancellor. Drawing up a weekly or monthly budget will help you get your finances under control. There are plenty of templates online to get you started, like the Money Advice Service or Money Saving Expert budget planners.
Use a money management app
Budgeting apps can also be used to plan what you want to spend and keep track of it. There are plenty available, including Money Dashboard, Loot, Squirrel, Yolt and Moneyhub.
You can now also use your phone to keep track of your Royal London pension. We’ve developed a new app so you can easily keep track of your individual or workplace pension plan. Read our article to find out more about how the app works and where you can download it.
Start a savings habit
Once you’ve started managing your money and you’ve cut back on unnecessary outgoings, you should find you have a little more left over each month that you can start saving. It doesn’t have to be much – the smallest amount will start to add up over time. Just get into the habit of putting some money aside regularly so that it becomes a habit.
Find a good home for those savings
Finally, shop around for the best account for your savings. Take the time to find a higher-interest account and your money will grow even faster as the interest builds up. You can find more information on choosing a savings account on the Money Advice Service or Which! websites. Or, if you’re interested in investing too, read our article on whether to save or invest your money.
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Monitoring where our money’s going can have a big impact on our attitude to spending and how much we save. Read our tips to help get you started.
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