saving money, when debt free

bonnie_2

my debts will be gone in march, yes i mean it this time. but being a spendaholic and seeing all that cash available, how do i stop myself spending it. ok i dont have credit anymore, cant get it. so it would have to be cash anyway, but i really dont know how to stop myself.
Any suggestions, i would like at least £3000 in bank by end of next year.

summerday

Hi Bonnie,

You could set up a standing order to a savings account so that a set amount comes out of your account the day after payday, so you won't have a chance to spend it or even think about it. Just think of it as an extra kind of tax but one that benefits you!

Sarah

tomstickland

Set yourself a regular saver account like the A&L 10% one. Set up a standing order to pay in £250 per month and you'll have £3000 plus interest after a year.

homersimpson_3

provided you have emergency fund & you don't need instant access to it
put it in high interest regular saver where money is tied up for a year and you can't get your paws on it. Think of it as an outgoing/bill which has to be paid.

climbgirl

I guess this is where the will-power comes in!

I find that I'm much more likely to save if I treat the savings like a bill to be paid and move it to a savings account as soon as possible after payday.

I keep my savings in an ISA, and then in a high-interest savings account that can't be easily withdrawn from. Like ING for instance - if I want that money it takes 3 days to get to my current account, so it removes the possibility of impulse buying.

Leave your cards (debit or credit!) at home, and operate only in cash. You can only spend what you've got then. Some people swear by this, others prefer to use cards saying that having cash makes them spend more. Whatever works for you!

Once you start saving it'll grow quickly and it's fun to watch it grow! It becomes almost like a little game you play with yourself - how much can I put in there?! Just like paying off your debt, except this time it's all yours

Someone taught me a little trick that made me think twice about impulse buying. You work out your hourly rate of pay - after tax, and also after the essentials - rent, food, heating, water, etc. Then if you really want that £60 pair of shoes, ask yourself how long you will have to work to buy them. If you're happy to work x number of hours, fine - buy them! If not, don't. It really makes you think about the value and worth of your time!

ms_london

I turned debt free on the 27th October, and today I got paid which is my first pay cheque which is all mine, mine, mine - yippee!! However, as great as it is to be debt free, I am the opposite to you & am not at all worried that I will blow my wages and not save any. Infact, I want to save as much as I can, and will feel guilty spending more than my usual £50 a week budget..

I have been living on a tight budget for so long now, anything above that feels extravagent - even this month I have £200 left over (money that has rolled over from month to month and also extra ebay income money).. I'm not bragging, I am just going to find it hard to strike a realistic living/saving balance..

I've turned into scrooge!!

Anyway, well done on your soon to be debt free ness - thats fab, and not at all long to go! :0)

Ms_London xx

no_debts_no_more

That's my trick.

I work in IT, so have access to my accounts via online banking at almost all times of the day. I access them most days to keep a check on everything - current account, joint current account, credit card accounts, savings accounts and mortgage.

(It really puts things into perspective when you see the -£lots in the mortgage a/c _pale_ )

I drip feed money from my current account into my savings account in small quantities at short regular intervals. I would notice £300 straight out of my bank account just after payday, and worry if I've got enough money to get through the rest of the month. But £25 every few days, or £75 a week is another matter. I still feel comfortable that if some essential expense comes up, I can meet it, and my savings a/c builds up. I also never forget a bill, but can pay them not quite straightaway, but before they start charging extra, thus aiding cashflow, by putting in the payment once I get the bill, but set for a date in the future. The regular CC (with points!!!) gets paid off in full every month this way. To reduce effort, I queue payments into the savings account at the beggining of the month - I can always cancel them if something comes up.

Although the savings account isn't a notice account, and I can get the money anytime, it is setup to be sufficiently inconvenient to get the cash that a large impulse withdrawal is not possible. We're saving for a new car, as both of ours are nearly worn out (mine, 10.5 years & 130K miles), and neither will transport the 2adults +2children we'll be in a couple of months time.

This is also the way I play the 0% credit card game. I have both parents birthdays, plus wife, plus car insurance plus Xmas to pay for now, so I'm using credit card for 54 days interest free, then transferring to 0%. Drip feed money onto the debt, and pay it off before interest. I don't stooze - just use it to aid cashflow, or treat myself to something I want on 0% credit.

This isn't for everyone, but internet access is so convenient for me that I can keep a really good tab on my accounts. This helps me "pace" my spending so you don't go overdrawn at the end of the month.

P.S. It also alerted me to a CC cloning a couple of months ago, when I saw strange transactions. Without it it could have gone on for a few weeks until I saw the paper statement.