How to save? Where to start?

pink_bride

Sounds daft, but how do I go about saving? I don't have any savings, at all. And at the end of the money I'm about £149.50 into my £150 over draft.

I'm making the necessary steps to stop spending as best as I can, I've made a spreadsheet of all my outgoings, with my income, and it says I should be left with £700 once I've paid all my bills - this includes transferring £150 into a new savings account. The thing is, I never have anything left and I've no idea where the remaining money goes!

So, I need help to scrimp and save and I'm determined that at the end of Oct, I will have money left over.

Give me your tips!!!! TIA

National_Debtline

Hi pink_bride

A statement of affairs (SOA) is a great place to start, you can one in the DFW sticky at the top of the board. You’ll be able to see what your income and outgoings are and get an idea of how much you should have left over that you can afford to save.

I’d suggest that you start by trying to get out of your overdraft, especially if you are being charged interest. Do you have any other debts at the moment? Unless you earn more interest on your savings than you have to pay on your debts, it’s generally best to clear debts as quickly as possible.

Once you’ve posted your SOA you’ll get lots of tips and advice from other members of the board. Good luck with it all.

Susie
@natdebtline

ReadingTim

You need the following:

• A Statement of Affairs / budget to see where it should go
• A spending diary to see where it actually goes
• Self-discipline to stick to the budget

Ultimately, the only way to save is to spend less than you earn.

117pauline

If your budget says you should have £700 and you don't have that amount of spare cash, a spending diary will help.

Have you missed one of your direct debits from your spreadsheet? It's easily done.

Do you have credit cards? Do you know the rates of interest on them?

I guess the answer to the question "how to save?" is how much do you really want to save? Is it for something specific, build up reserves or just because you think you should?

Savings are all about the idea of making a budget, keeping to it and making cuts whilst benefitting later - delayed gratification. If you don't really want to save, it's easy to find excuses for breaking the budget.

Most people advise paying yourself savings before you plan your everyday budget.

i save for a variety of things:

yearly bills such as house and car insurance, prescription prepayment card

holidays

presents

other - passport, glasses

emergency fund for one offs - replacing equipment, repairs etc

If you are used to spending everything then saving is difficult to begin with. But the good bit is, the more you save, the more you want to save!! Sad but true.

Also have a look to see if your spending is emotion based. Do you buy ready made foods or takeaways when you are tired/feeling fed up/overwhelmed/no time etc etc.

Good luck
Pauline

EssexHebridean

The straight answer to "how do I save" is as simple as "spend less than you earn" - and at the moment this seems to be the thing you have a problem with - so that's the thing to address as has been said above.

spending diary is a great idea - if you genuinely should have £700 a month left over and you don't, then to put it into perspective that is £8400 a year that you're currently just "losing" that you should have available to you - so the value of a small car, if you like. Sounds a lot like that, doesn't it!

Make sure that your budget includes everything you spend - if you've done it off one month's outgoings then the chances are it doesn't as it will be missing anything that for whatever reason did not go out in that month. Make sure things like insurances etc are accounted for - and for things that are paid annually save 1/12th of those each month so the money for them is ready and waiting. Dedicated savings accounts for car expenses (if applicable), whatever you budget for a holiday, household expenses (insurance, the odd small appliance that needs replacing etc) and similar can be helpful, particularly if you set up a transfer for a regular amount to go to each of them at the start of the month.

Remember when thinking about "spare" money that it won't account for random spending like the odd coffee out, a takeaway at the end of a long month, grabbing an item of clothing or a tube of toothpaste while out and about because you've remembered that you needed it - that sort of thing. And if any of those things have become habitual then look to cut them out or at least reduce frequency - the "disincentiviser" tool on the main site might help here, as might Martin's Money Mantra.