Together with financial wellbeing experts, Nudge, we consider how to better manage our money by setting goals or budgets and learning to be thrifty
Did you know...
- 4 in 10 go into debt for holiday shopping
- Half of us plan to pay for the holiday on our credit cards
- The average credit card debt per UK household is £2,626
- Outstanding credit debt in the UK is at £56.5 billion.
- Households spend a budget-stretching £740 more in December than they do the rest of the year, with 39% of us using our savings
- Almost one in ten households have admitted to relying on their overdraft to pay for Christmas
It's clear from the statistics above that we have come to rely on credit cards and borrowing rather than using savings for luxuries such as holidays and Christmas. Wouldn't it be nice to manage to save enough to pay for a holiday, or to not be in debt after Christmas?
Nudge have put together some thrifty ways we can look after our money and save, without having to penny-pinch:
Take Stock and Set a Goal
Saving money can be tough, but having a goal in mind means you're less likely to put it off. Monitoring and tracking your progress can also often generate more motivation to get to your goal.
Goal setting doesn't have to be boring; it can help to trigger new behaviours whilst helping to guide your focus. Think about short, medium and long-term when it comes to goals. This can help make saving more realistic and gives you an idea of what you need to be putting away regularly to reach them.
Looking After the Pennies
- Use price comparison sites and shop around when an insurance policy is due for renewal.
- Keep an eye on your mobile phone cost. Check you're not paying for calls, texts and data you're not using, or regularly going over your allowance. Considering switching to a different plan or shop around for a different network using comparison sites.
- Reduce household bills. See our 'super savvy saving' tips to find out how.
- Consider using savings to clear debt.
- Keep your receipts. For self-employed individuals, it is often helpful to save receipts from every purchase you make that is related to your business and to keep track of all your utility bills, rent, and mortgage information for consideration at tax time.
- Check your statements. It's not a thrilling way to while away the hours but going through your bank statements will give you a realistic sense of what you're spending your hard-earned pennies on, and it might throw up a few surprises - we can all be guilty of setting up direct debits and forgetting all about them. See if there's an obvious area where you can cut back and be on top of all your outgoings.
Tips for being Thrifty
- Treat your savings like a bill by setting up regular payments into your savings account.
- Sweep up the leftovers. If at the end of the month you have money left in your account, consider moving it into a savings account before payday comes around again. If this is a common occurrence, decide on a realistic amount and set up a direct debit so that it can be moved at the start of each month instead.
- Pay yourself a 'spending' allowance. Withdraw cash for the week, or put it in a different account and try to keep your week's spend within that amount. If you have any left at the end of the week, put it into a savings pot - see how much you can save in a year!
- Set challenges and make saving much more fun. See if you can aim to reduce your weekly shopping, for example, by meal planning. Planning out meals for the week means you know exactly what you need to buy, it also reduces food waste and less trips to the supermarket means fewer opportunities to impulse buy!
Top Tips for Better Budgeting
- Stop those impulse online purchases. Ask yourself if you actually need it before hitting 'buy'!
- Write down your regular spends and use a budget planner.
- Have 'no spend' days. Set yourself challenges and get the rest of your family on board.
- 50/30/20 rule. 50% of your salary for essential bills, 30% of your salary for things you want and 20% of your salary to put into a savings account.
- Jam jar method. Split your spending into physical or digital containers, using pots, jars or an online tool. This will help you have much clearer visibility of your budget and also help you to stay within your spending limits.
- Get the whole family involved and work together - maybe you'll save enough for a family holiday next year!
- Categorise - needs vs wants.
- Shop around for better deals. Use comparison sites to reduce outgoings.
This blog was brought to you by the team at Nudge. a personal finance solution that helps people maximise financial opportunities, overcome financial problems and make managing money stress free. https://www.nudge-global.com/
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