Working on how much you should save each month can increase your contribution towards an emergency cushion. Experts say you should set aside at least three months’ worth of living expenses to tide over during financial emergencies.
This is what you have already hard many a time before. Yet, you find it very difficult to build an emergency cushion. Lack of motivation is what prevents you from prioritising paying yourself first every month, followed by not knowing where to start.
Saving money can be daunting, although it should not feel so. With the cost of living testing your finances like never before, you must have realised that you cannot manage without savings. When things seem complicated to come through, going back to the basics is a golden piece of advice.
Here are some of the valuable suggestions to help you save money each month:
- Clear your debts
Debt sucks! They are notorious for eating into your hard-earned money because you are to pay interest on top of what you borrow. Clear your debts as soon as possible, so you can transfer the money you pay on interest to your savings account.
Use either the debt avalanche or debt snowball method. Talk to a financial advisor or debt management company if you are unable to come up with a strategy that works in your favour. Use a budgeting method of 50/30/20 to consistently stash away 20% of your income.
Find an accountability partner, as it makes it easier to do things you find unappealing. The fear of letting someone down or failing to keep words can be a reason to keep going.
- Find ways to save on utility bills
Utility bills pose a threat to your finances in the winter season when you keep the heating system turned on, but there is still a way to keep utility bills down. Compare the tariffs other utility service providers offer and switch to the one that fits your budget.
Use energy-efficient appliances. Make sure your boiler does not consume too much bill. Use LED bulbs as they consume 90% less energy. Unplug electrical devices instead of putting them on standby mode. Keep tracking your utility bills every month and find areas where you can use less electricity.
- Save money on food
It is not surprising that many people take out loans for bad credit with guarantors in the UK to fund their grocery bills. You can save money on food by preparing weekly meal plans. Knowing the menu for a week will keep you from takeaways. Restaurant meals are very expensive. They will quickly exhaust your money.
It is OK to order food once in a while, but make sure you mostly prepare meals at home. Buy groceries from stores where you can save some of your money. You can take advantage of special schemes and offers, especially by stockpiling. Ensure you do not stock up on things you do not need or are perishable. This will be more waste than saving.
- Cancel unused subscriptions
Subscribing for a service is very convenient, but unsubscribing seems laborious. Most of the subscription services use a continuous payment system, meaning the amount is automatically debited every month on a fixed date.
Cancelling an unused subscription will help save you a lot of money. Get to your bank statement to see how many services you have subscribed for and how many of them you actually use. Once you make a list of unused services, you should opt out of them. Make sure you have received a confirmation email.
Think about the subscription services you use. How often do you use it? For instance, paying a monthly plan for Netflix will cost you an arm and a leg if you watch it for hardly a week. Is there a more affordable alternative? Can you manage without this service?
You should cancel the subscription service if you do not use it often or if an affordable alternative is available.
- Buy goods from online stores
If you want to buy an item, you should consider buying a secondhand item. You can get a good bargain without shelling out money. There are several online marketplaces like eBay and Amazon.
In fact, you can buy firsthand goods at lower prices from these stores. The feeling of getting a good bargain can be priceless. These steps are helpful only when you pop money into your savings account.
- Save on your phone and broadband bills
Assess your phone plan to see if you have got the best one. Compare other plans and then choose the one that best fits your budget. There is no point in using broadband if your mobile data is more than enough.
At the time of buying a new phone, ask yourself if it is actually the right time to upgrade your mobile phone. Try to pay for your mobile phone upfront, as monthly instalments will cost you more than the actual market price.
Shop around before buying a mobile phone, as some stores can offer you additional discounts. Many people buy expensive mobile phones and fund them with personal loans for bad credit. You can avoid it if you do proper research before that.
Buying phones from online stores will help you save even more money.
The final word
Saving is a must, so you do not need to rush to online lenders to borrow money when you feel the pinch. Be consistent with your efforts to keep your emergency corpus growing. Clear your debts and then create a budget to ensure you do not overspend.
Keep tabs on your spending every week or month. This will throw light on your actual spending. To stay on top of your expenses, you must know how much money you have spent and where. In addition, find ways to save money on food, phone bills, and utility bills and cancel unused subscriptions.
You might still need to borrow money. Make sure you take out a loan from a reputed direct lender that lends you money at the most affordable interest rates.
John Keats is a professional content author, specialising in writing blogs and articles covering a range of topics related to the finance and loan industry of the UK. He has been working in the UK finance marketplace since 2009. John has written hundreds of blogs and articles on diverse financial topics. John has experience in several finance areas but mainly belongs to the lending market. He has worked with many reputed financial companies and lending firms. Currently, he is the Senior Content Writer at GetLoansNow, a new-age direct loan provider offering various kinds of online loans. John also contributes to the company by preparing borrower-friendly loan deals and guiding them via his research-based blogs. John Keats has a PhD in Business and Finance from the prominent UK University and a post-graduate MBA in Finance.