Twenty-Twenty. The roaring twenties. The start of the decade. The year you get your life together and start saving money.
While exercising more, drinking more water, drinking less wine, reading more and generally being a nicer human tops most people’s New Year’s resolution lists, we should focus on improving our finances too.
Saving money is something we all know we should be doing, but is easy to push aside.
Especially when life, or fun things, or a sale, pops up.
But saving money can save your wallet, your mental health and even your life! (This may sound a little over the top, but I reckon there are instances where that’s true).
If you’ve never saved a penny in your life (I feel you), check out our guide to start saving money in 2020. It’s never too late or too early to start!
How To Save Money: Start Small
Saving money is HARD.
Saving money when you don’t have much money is hard. Finding money to save when you’re habitually spending is hard. Saving money when you’re supporting others is hard. Saving money when you’re trying to pay off debts is hard.
But if you start small, it’s possible.
Putting £2 every week may feel insignificant, but it’s forming a habit that can be scaled up when possible.
And hopefully it won’t hurt your bank balance, regardless of what financial situation you’re in.
How To Save Money: There’s An App For That
If you’re too forgetful to manually put away a small amount every week or so, you could either set up a direct debit or download an app to do it for you.
AI-based learning apps, such as Plum or Chip, will analyse your spending habits and take out small chunks of money that they deem will not affect your financial quality of life.
Hopefully, by the end of the year, you will have a tidy sum squirrelled away. And you will have achieved this with little to no effort on your part and without a dent in your day-to-day finances. Financial perfection.
How To Save Money: Set a Goal
Like I mentioned, we all know we *should* be saving, but yet we don’t.
If you’re going to keep the habit of saving, you need to have an emotional investment to really dig deep and find motivation.
So, ask yourself why you want to save. It is the why that will make it easier to say no to the last minute events and enticing ‘SALE NOW ON’ emails.
It’s the why that will help you say no to yourself, when you really don’t want to.
Set yourself financial goals to focus on your reasons.
If you want to pay off your debts, make that your goal. If you want to go on holiday, start saving for your dream trip. Just got engaged, think about how your savings will go towards your wedding day.
How To Save Money: Start Now
When it comes to saving money, it is never too early or too late to start.
Even if your money is tied up in debt repayments and hefty bills, make sure you’re putting small amounts away to start forming the habit of saving.
And if you do have some money left over to save after you’ve paid the minimum repayments on your debts, then don’t be scared of saving as well. You can do both!
Plus having an emergency fund saved could save you from having to take out more credit when an emergency expense pops up - and they always do!
If you’re debt repayments are swallowing up too much of your income and you’re struggling to pay your debt down - then consider consolidating your high-interest debts into one, low-interest loan. Take a look at our debt repayment calculator to see how much interest you could save.
Once you have control of your debt repayments, it’ll be easier to budget, pay down your debts and start saving money too.
How To Save Money: Next Level Savings
Make more money from your money.
Level up your savings by looking for a savings account with the best interest rates.
The interest rate is usually a percentage offered to you for ‘investing’ your money into a savings account. The rate often depends on the ease of access to that money, with flexible easy-access accounts offering lower rates.
But something is better than nothing!
At Leap, we operate a peer-to-peer lending platform that could level up your money even more.
With peer-to-peer investments you can look to return up to 5%, which is a fair bit more than your standard savings account (although capital invested in any P2P platform will be at risk).
Explore how you can make your money work harder and find out more about peer-to-peer lending with Leap.
How To Save Money: Get Creative
If you need to add some fun, there are plenty of strategies and apps that allow you to gamify your savings.
Monzo have curated a number of If This Then That (IFTTT) programmes to help you save without realise. You can choose to save every time you Tweet - literally a penny for your thoughts - or save every the temperature drops below a certain point.
The 365 challenge encourages you to put away £1 on Sunday, £2 on Monday, £3 on Tuesday all the way up to £7 on Saturday. And repeat!
By the end of the year you would have £1,456 put aside. For motivation, and money, finding a suitable challenge could be the best way to get creative with your finances.
So, whether you need time, fun or a goal - there are plenty of tips to help you get started on your savings this year!