How Can I Save Money?

I don't spend much!?!

Posted:Abigail Andrews – Saturday, May 26th, 2007

You really have to work hard at this. All of us like spending money, spending less is hard because buying stuff is fun. Most of us don't really know how much we actually spend a day. We may approximate, but usually, if we start writing it all down, we are surprised at how much money we waste on "rubbish" we don't really need.

Most of us don't really know how much we actually spend a day.

One insurance company has estimated that on average each of us spends approximately £2000 a year on stuff we never use. So next time you want that new car and think you can't afford it, start thinking of how much you spend on things you don't really need. I don't just mean those cans of pop you buy at work everyday, I also mean when you leave that light on in the kitchen when you are watching the television in the front room, I mean driving round on flat tyre's, I also mean that magazine you buy and only half read, or that top you buy that you wear once.

Saving money is one of the first and most important steps to taking control of your finances. Financial health begins with earning money, but for good healthy finances we also need to know how to manage the money we earn. Ultimately, you need to educate yourself to be financially healthy. It's scary how many people have no idea how to manage their money, particularly how to save money and why they should. It's even more scary how many people do not know what the reality of their financial situation is. They don't know what they earn and what it costs them to live. They have no idea what their total outgoing's are, and what's more too many people do not have any savings.

The following pages concentrate on saving money to be financially healthy. There are changes you can make to save money, right now, big and small. Make some small changes today and by the end of the month you may be quids in!

Steps to Saving More Money

Analyse your Current Financial Situation

Get your last 6 months bank statements and wage slips and analyse them to death.

• Work out what you are actually spending your money on
• Work out your total incoming's
• Work out you total outgoing's
• Work out where you are wasting money and set your self budgets, daily, weekly and monthly
• Work out budgets for food, luxuries and essentials

In future set yourself time every day, week or month to go through your finances. Stop turning a blind eye and ignoring it, its an important task.

If you can't be bothered at least thinking about where you waste money and where you could save money, then you may as well stop reading now.

Record your Finances

There were days where I went to the cash point and withdrew £20. By the end of the day it had all gone. For the life of me I could not remember what I had spent the money on. I could have sworn I had a hole in my purse. Even if you don't think you spend much money, it is worth jotting down what you are actually spending your money on. When you add up that 60p can of coke you buy at work 5 days a week, it's approximately £152 a year. If you had to buy your cola allowance on a yearly basis, would you really want to hand over £152 to "cola company" in one go? I bet not!

So keep a diary of your spending. Every time you spend money, write it down. Just doing that will mean you spend less and save money. At the end of the week or month - analyse it. You will be staggered by how much you money you waste.

Spend Less than you Earn

For some people, self-control is a real issue and if the money isn't 'accounted for' immediately, they tend to spend it on impulse and luxury items that are non-essential.

If you find yourself in this category, or have trouble saving money, you could think about creating a savings account that is automatically funded each month. To do this, you may need to create a monthly budget to determine a monthly savings goal. If you do create a budget, make sure that it is realistic, matches your lifestyle and that it leaves plenty of room for hidden expenses that seem to pop up regularly. If you create an unrealistic budget you'll be likely to save less than what your budget calls for, become frustrated and resort to your old ways.

Cut Back on Little Things to Save Money

Calculate how much you spend on things you don't need a everyday at work. A can of pop, a bag of crisps, a sandwich and a newspaper and a coffee - approximate total £5. STOP! If you made your own sandwich and took dilute juice to work, drunk the free coffee, and did without the bag of crisps, you could save at least £3.50 a day. The equivalent of approximately £900 a year. That would probably pay for your car expenses like insurance, tax and MOT for a whole year!

Stop Spending Tomorrows Money

Credit cards and loans kill your financial freedom and ultimately cost you more, as most people do not pay their credit card off in full every month. Even those with the best intentions usually end up paying interest at least 6 months of the year. So cut up those cards and pay them off as soon as you can. If you have not got the cash to buy, don't, you can't afford it!

Stop, Think and Don't Impulse Buy

Only carry money you need and make a pledge to yourself to only buy after at least 30 minutes thought. Next time you see a top you "must have" or a CD that screams "buy me", or even something as simple as a can of coke, STOP! Use those extra minutes to think, 'do I really need it? will I ever use it? will I use it more than once?'. If the answer is 'no', put it back. There is no harm treating yourself occasionally but make sure you get the best value from your treats!

A final thought - The key to successful money saving is spending less than you earn! Ultimately - STOP SPENDING!

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