Budgeting and Money-Saving Techniques

Every dollar matters during a cost-of-living crisis, so learning how to create a budget is not only prudent but also necessary. Consider your money as a leaky bucket that requires constant filling. The holes in your bucket get bigger when groceries, energy, and housing costs rise. The best way to control leaks and maintain a full bucket is through clever budgeting.

Increasing your savings can seem like a difficult task when costs rise. However, with as costs rise, saving money is still feasible with smart budgeting. Having a strong savings plan is essential, whether you’re setting money aside for emergencies or a financial goal.

We’ll give you smart money-saving tips and budgeting techniques in this guide. With our practical advice, take charge of your finances and create a safe financial future.

Rules for budgeting that make managing money easier

Here are some simple budgeting guidelines to help you with money management.

• 50/30/20 budgeting
• 80/20 budgeting

These guidelines offer a structured approach to monthly savings, assisting you in reaching stability in your finances. It’s easy: you allocate different amounts of your monthly income to savings and spending, with the majority going toward your savings account.

Since everyone has a different monthly income, these rules might not apply to everyone. Consider them as recommendations. You can adjust them and use other percentages that are more appropriate for your situation.

50/30/20 budgeting

By using a 50/30/20 budget, you can clearly plan your monthly spending.

• 20% of your income goes into savings
• 50% is for spending needs
• 30% is for spending wants

Needs are the costs that are required. They might consist of paying your bills, groceries, rent, or mortgage.

What you would like to buy but aren’t necessities are considered wants. This could include anything from new clothes to weekend trips and eating out.

Let’s examine an example to better understand how the 50/30/20 budget operates.

Say you earn £2,000 per month after tax.

20% (£400) goes into your savings

80/20 budgeting

A more straightforward version of 50/30/20 budgeting is 80/20. You should set aside 20% of your income for savings and use the remaining 80% for all other expenses.

• 20% of your income goes into savings
• 80% is for spending (needs and wants)

Let’s examine an example where your take-home pay is £2,000 per month.

20% (£400) goes into your savings

80% (£1,600) is for spending (needs and wants)

Simple daily strategies to cut back on spending

Searching for strategies to increase your savings and approach your financial goals? There are many ways to make the most of your money, such as reducing pointless subscriptions and doing more strategic grocery shopping.

These 8 money-saving tips can help you free up funds to put toward savings.

1. Enjoy no-spend weekends 

Mark a few chosen weekends as “no-spend weekends” when you plan to save money by not making any purchases. This could occur every other month or just one weekend per month.

Spend less and still have fun! In the UK, there are lots of free events and attractions. There is something for everyone, regardless of whether you are an outdoor enthusiast, sports fan, or family with young children.

Take a stroll through the countryside, visit free museums, or stay in for a movie night. Additionally, they’re a fantastic chance to use up any leftovers and create new dishes using near-expiration ingredients.

2. Learn about subscription services

It’s simple to commit to something and then forget about it. According to research, 1 in 10 individuals may not be using their subscriptions, and 65% of them spend £132 or more a year on pointless services.

You may be locked into several subscriptions, whether they be for magazines, streaming services, or fitness apps. Do you really need them, though?

Examine your subscriptions and remove any that you no longer need. Examine the ones you do use and determine whether you can live without them to save even more money.

You might be a subscriber to any of the following services:

• Amazon Prime
• Apple TV
• Disney+
• Gousto
• Hello Fresh
• Netflix
• Patreon
• Sky Cinema
• Sky Sports
• Spotify Premium
• Strava Premium
• TNT Sports
• YouTube Premium

Develop the habit of routinely checking your direct debits; if you find any that aren’t needed, stop making the payment.

3. Compare costs for utilities and insurance 

Price comparison websites are an excellent resource for additional cost savings. You can find the best utility deals by using these helpful websites. To save money on monthly and annual bills and to add to your savings, compare prices for insurance policies, gas, electricity, TV and broadband packages, and insurance.

4. Where feasible, make an annual payment

If you can, it’s a good idea to pay for the entire year’s worth of coverage after spotting the best deal on an insurance policy.

Spreading expenses and making monthly payments for insurance, such as auto insurance, may appear more cost-effective. However, when you pay in installments, some companies increase the interest on your premium.

Making a single, large payment could have a more detrimental effect on your finances. Though it can help you avoid additional interest on your policy, it’s only a good idea if you can afford to take the financial hit. lower insurance costs? Please say yes.

5. Increase the range of your fuel

Buying fuel can be expensive. However, a few frugal suggestions can help you control how much you spend on gas and diesel.

Look for the most affordable gas stations in your local area. A few pennies a liter can add up, even if the best deal is a little bit farther away. With this useful tool, you can find out which nearby stations sell fuel at a discount.

To get the most out of every fill-up, you can also maximize your fuel by avoiding driving with too much weight in your car and by rolling down your windows rather than turning on the air conditioning.

6. Find online discounts

When making an online purchase of clothing, electronics, or groceries, it’s wise to look for promo codes before completing the transaction. If you sign up for an online retailer’s newsletter, you can often receive discounts or codes for being a new customer.

When making purchases from online retailers, you should also check cashback websites. These websites offer cashback, discounts, and coupons for online retailers to help you get more value out of your money.

Remember that you have other options besides internet shopping! While the convenience and next-day delivery of online retailers like Amazon can be alluring, you may be able to find better deals at high street and supermarket stores.

You should also consider if you truly need this. Spend no more than you can afford by using your common sense.

7. Raid the reduced section

Speaking of supermarkets, check out the reduced section of your local store for a tonne of deals; keep an eye out for the yellow stickers! Choose tasty ingredients that are almost ready to eat or freeze, or seize deals on products that are damaged in packaging.

8. Adjust to shifting conditions

Because life isn’t always predictable, you might need to temporarily reduce the amount of money you put into savings for a while due to unforeseen circumstances like a broken boiler or urgent auto repairs.

It is crucial to adapt when it comes to budgeting. Make sure your plan is still in line with your financial circumstances by reviewing it regularly. Adapt your saving habits as necessary, and remember to be kind to yourself during difficult times.