5 Tips To Help You Save Money – QROPS Pensions & More
Have you always wanted to save money, but found it difficult to get started? You are not alone as it is thought that the hardest thing about saving money is actually starting to do it. If you are not used to saving money, it can be difficult to know where to start. In the following article though, you will find 5 helpful tips to get you saving money and use your money more productively and effectively.
Keep A Record Of What You Spend
Before you start saving it is a good idea to make a record of what you are currently spending your income on. This means keeping track of absolutely everything from your bills to that coffee and sandwich at lunchtime. Once you have at least a month or two’s worth of your outgoings, organise them into various categories like mortgage/rent, utilities like gas and electricity, groceries, clothes, entertainment etc. You will now have a detailed breakdown of where all your money is going.
After you have established just what you are spending in a month and what you are spending it on, to start saving you need to establish a budget and stick to it. A sensible budget is one that will stop you overspending and help you plan out exactly what you are spending every month, week or another period of time. As well as your monthly expenses, you should also budget for the payments and outgoings that are less regular than every month but still occur often such as MOT and other maintenance related charges.
Calculate Your Savings In Your Budget
Ideally, you could do this while establishing a budget for your spendings, but you could also do it after you have worked out what you are spending each month. The important thing is to calculate your savings into your budget, so you are always able to do it. Normally, it is wise to aim for saving around 10 to 15% of your income. If you have too many outgoings that don’t allow you to save as much as that, you may have to consider cutting back or eliminating unnecessary outgoings and expenses that are preventing you from saving. Saving something each month is better than saving nothing, though.
Perhaps one of the best ways to get into a good saving habit is to do it with a purpose. Think about things you might like to save for – whether it is a holiday, car or even a down payment on that new house you’ve wanted for years. Next, work out how long you might need to save for to achieve your goal. Saving with a purpose gives you extra motivation to actually do it and it means you may also be able to afford those things you have long put off because you could never afford them in the past. I started doing this when I decided on a QROPS Pension. For more info on QROPS, see the QROPS Help Centre for specialist QROPS advice.
Set-up Automatic Saving
Even with a strong budget in place and something to save for, you may still find it hard to put a percentage of your money to the side each month. The easiest way to rectify this is by making savings automatic. You can set-up automatic transfers from your earnings or bank account to a savings account. That way, before you even get your earnings to play around with, you have already put money aside for your savings.