Once Christmas and New Year are over, it can seem a daunting task to get back into our usual spending habits. However, saving money in January doesn't have to be difficult. At Money Dashboard, we want to help you devise a stress-free strategy for looking after your money in the New Year. To get you started, follow this step-by-step guide to savvy saving this January.
Assess your current spending
Examine your income and expenses to identify areas where you could save money. Money Dashboard's free, secure money management software displays all your financial information in one place, so you can easily see where you can cut back. Start with your biggest costs:
- Look into your energy usage with a meter readings app and consider changing suppliers to bring your bills down.
- Keep the receipts from your grocery shop and look at how many of the items were absolutely necessary. You could also switch to own brand products and use coupons to lower your spend.
- If debt is consuming a large proportion of your income, consider using savings to pay it off - the lower interest rate will save you money in the long run.
- Reconsider all subscriptions, memberships and direct debits. Assess which of them are absolutely necessary - cutting a few out could save you hundreds.
- Having a full view of where your money goes each month is the only way for you to clearly see where you can save in the future and start setting realistic goals.
Make specific and attainable goals
Once you have identified where your money goes each month, you can start thinking about more specific targets. Make sure that these are simple and within reach, for example you could aim to:
- Pay a direct debit of £50 per month into your savings account.
- Save £10 per month on your energy bills.
- Reduce your weekly shop spend by £5.
- Save £20 per month on hobbies and subscriptions.
Next, set intermediate goals to reach these targets, for example:
- Turn your heating down by one or two degrees.
- Cut two dessert treats per week from your trolley.
- Compare prices online before making a big purchase.
- Cycle to work instead of taking the bus.
- Switch to a 0% interest credit card.
Finally, set a realistic timescale for achieving these targets. Set reminders and use a calendar to remind you of the deadlines.
Earn as you spend
As well as thinking about how you can cut back, it's wise to look at ways you can boost your income too.
- If your credit card offers cashback, and you pay it off each month by direct debit, pay your bills with it to gain a little cash boost.
- Use cashback sites to earn money every time you shop.
- Sign up to an online auction site and sell unwanted Christmas gifts online.
Always have a failsafe
Your goals and targets may be realistic, but you should always try and plan for unforeseen circumstances. For example, you might want to set up an instant access savings account, so you can always cover unexpected costs without cancelling your savings plan. Remember to leave enough slack though, so that if you overspend in one week or month, you can make up for it in the next. Money Dashboard's handy budgeting calendar can also come in useful; by factoring in an allowance for potential future spending you can make sure you avoid unwelcome surprises.
Posted by Money Dashboard